JP Morgan slashes price target on The Gap Inc. [GPS] – find out why.

The Gap Inc. [NYSE: GPS] stock went on an upward path that rose over 3.11% on Tuesday, amounting to a one-week price increase of more than 9.41%. The company report on November 25, 2020 that Gap Inc. Reports Third Quarter Results.

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Year-over-year net sales were flat, reflecting a meaningful improvement versus the prior quarter, including a 5% rise in comparable sales, and a 61% increase in online sales.

Acquired 3.4 million new customers through our online channel, representing over 145% growth in new online customer acquisition year-over-year.

Over the last 12 months, GPS stock rose by 56.59%. The one-year The Gap Inc. stock forecast points to a potential downside of -19.42. The average equity rating for GPS stock is currently 2.90, trading closer to a bullish pattern in the stock market.

The market cap for the stock reached $10.05 billion, with 374.00 million shares outstanding and 208.40 million shares in the current float. Compared to the average trading volume of 9.51M shares, GPS stock reached a trading volume of 11586494 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Guru’s Opinion on The Gap Inc. [GPS]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for GPS shares is $22.50 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on GPS stock is a recommendation set at 2.90. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

JP Morgan have made an estimate for The Gap Inc. shares, keeping their opinion on the stock as Overweight, with their previous recommendation back on November 23, 2020. While these analysts kept the previous recommendation, Telsey Advisory Group raised their target price from $17 to $23. The new note on the price target was released on October 23, 2020, representing the official price target for The Gap Inc. stock. Previously, the target price had yet another raise to $20, while Barclays analysts kept a Overweight rating on GPS stock.

The Average True Range (ATR) for The Gap Inc. is set at 1.23, with the Price to Sales ratio for GPS stock in the period of the last 12 months amounting to 0.72. The Price to Book ratio for the last quarter was 4.46, with the Price to Cash per share for the same quarter was set at 5.92. Price to Free Cash Flow for GPS in the course of the last twelve months was 30.18 with Quick ratio for the last quarter at 0.80.

GPS Stock Performance Analysis:

The Gap Inc. [GPS] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 9.41. With this latest performance, GPS shares gained by 30.44% in over the last four-week period, additionally plugging by 180.19% over the last 6 months – not to mention a rise of 56.59% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for GPS stock in for the last two-week period is set at 74.92, with the RSI for the last a single of trading hit 78.16, and the three-weeks RSI is set at 72.09 for The Gap Inc. [GPS]. The present Moving Average for the last 50 days of trading for this stock 20.13, while it was recorded at 25.07 for the last single week of trading, and 13.81 for the last 200 days.

Insight into The Gap Inc. Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and The Gap Inc. [GPS] shares currently have an operating margin of +6.16 and a Gross Margin at +37.39. The Gap Inc.’s Net Margin is presently recorded at +2.14.

Return on Total Capital for GPS is now 12.78, given the latest momentum, and Return on Invested Capital for the company is 4.72. Return on Equity for this stock inclined to 10.22, with Return on Assets sitting at 3.23. When it comes to the capital structure of this company, The Gap Inc. [GPS] has a Total Debt to Total Equity ratio set at 231.51. Additionally, GPS Total Debt to Total Capital is recorded at 69.84, with Total Debt to Total Assets ending up at 56.12. Long-Term Debt to Equity for the company is recorded at 203.77, with the Long-Term Debt to Total Capital now at 61.47.

Reflecting on the efficiency of the workforce at the company, The Gap Inc. [GPS] managed to generate an average of $2,721 per employee. Receivables Turnover for the company is 48.54 with a Total Asset Turnover recorded at a value of 1.51.The Gap Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.80 and a Current Ratio set at 1.50.

GPS Stock EPS

With the latest financial reports released by the company, The Gap Inc. posted 0.58/share EPS, while the average EPS was predicted by analysts to be reported at 0.41/share. When compared, the two values demonstrate that the company surpassed the estimates by a Surprise Factor of 41.50%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for GPS. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for The Gap Inc. go to 4.90%.

The Gap Inc. [GPS] Insider Position Details

There are presently around $5,672 million, or 58.00% of GPS stock, in the hands of institutional investors. The top three institutional holders of GPS stocks are: DODGE & COX with ownership of 26,731,582, which is approximately -6.285% of the company’s market cap and around 9.00% of the total institutional ownership; VANGUARD GROUP INC, holding 26,222,533 shares of the stock with an approximate value of $704.6 million in GPS stocks shares; and BLACKROCK INC., currently with $430.79 million in GPS stock with ownership of nearly 12.071% of the company’s market capitalization.

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Positions in The Gap Inc. stocks held by institutional investors increased at the end of November and at the time of the November reporting period, where 152 institutional holders increased their position in The Gap Inc. [NYSE:GPS] by around 44,160,123 shares. Additionally, 213 investors decreased positions by around 50,339,054 shares, while 59 investors held positions by with 116,576,356 shares. The mentioned changes placed institutional holdings at 211,075,533 shares, according to the latest SEC report filing. GPS stock had 58 new institutional investments in for a total of 18,428,534 shares, while 85 institutional investors sold positions of 12,439,820 shares during the same period.

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