Gap (GPS) Stock Climbs, Upgraded at Wolfe Research
NEW YORK (TheStreet) -- Shares of Gap (GPS) - Get Report are gaining 3.25% to $25.13 on Monday morning as Wolfe Research raised its rating on the stock to "outperform" from "peer perform," the Fly reports.
The firm said that potential upside to fiscal 2017 earnings is underappreciated and positive inventory and gross margin return on inventory inflections is on the horizon.
Additionally, Wolfe Research cited the stabilization and possible recovery of the company's Old Navy brand beginning in the second half of the year and supportive free cash flow and dividend yields, the Fly noted.
Separately, Wells Fargo raised its price target on Gap stock this morning to a range of $25 to $27 from $20 to $22, but maintained its "sector perform" rating, the Fly reports.
Gap's rally is likely to continue in the near-term, the firm said.
Wells Fargo said that Old Navy's comparable-store sales are set to ease and the company's recently announced cost savings initiative "drives a good deal of cushion to out-year earnings estimates."
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins.
But the team also finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: GPS