Gap (GPS) Stock Surges on June Sales, Analysts Remain Cautious
NEW YORK (TheStreet) -- Shares of Gap (GPS) - Get Report are climbing 4.95% to $22.70 in late-morning trading on Friday after reporting a 2% uptick in June same-store sales.
Analysts were projecting a 3.6% drop in same-store sales for the month, according to Barron's.
By brand, sales fell 1% at Gap vs. estimates of a 2.6% drop, while sales at Banana Republic fell 4% vs. the projected 10.3% decline. Old Navy sales rose 5% in June vs. expectations for a 3.3% decline.
But Cowen & Co., Guggenheim, MKM Partners, RBC Capital Markets and Wedbush all reiterated the equivalent of a "neutral" rating following the results, Barron's reports.
"Despite the improvement in comps and updated assortments, we remain on the sidelines with regards to the shares until we determine that this improvement is sustainable," Guggenheim wrote in a note.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Gap's strengths such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins are countered by weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.
You can view the full analysis from the report here: GPS
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 article's author.