Market Analysts see The Gap Inc. [GPS] falling to $8. Time to buy?


The Gap Inc. [NYSE: GPS] closed the trading session at $11.60 on 05/27/22. The day’s price range saw the stock hit a low of $9.51, while the highest price level was $12.03. The company report on May 26, 2022 that Gap Inc. Reports First Quarter Fiscal 2022 Results and Provides Updated Fiscal 2022 Outlook.

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Gap Inc. (NYSE: GPS), a portfolio of purpose-led, billion-dollar lifestyle brands including Old Navy, Gap, Banana Republic, and Athleta, and the largest specialty apparel company in the U.S., today reported fiscal 2022 financial results for its first quarter ended April 30, 2022.

“Our Q1 results and updated fiscal 2022 outlook primarily reflect industry-wide headwinds as well as challenges at Old Navy that are impacting our near-term performance. While we are disappointed to deliver results below expectations, we are confident in our ability to navigate the headwinds and re-stabilize the Old Navy business in order to deliver continued progress on our long-term strategy,” said Sonia Syngal, CEO, Gap Inc. “We believe that we can navigate this period of acute disruption and build an even more resilient and agile company. We remain anchored by our belief in our iconic purpose-led brands – Old Navy, Gap, Banana Republic, and Athleta – and are focused on making continued progress against our Power Plan strategy and getting back on track toward delivering growth, margin expansion, and value for our shareholders over the long term.”.

The stocks have a year to date performance of -34.28 percent and weekly performance of 6.13 percent. The stock has been moved at -33.06 percent over the last six months. The stock has performed -9.80 percent around the most recent 30 days and changed -20.27 percent over the most recent 3-months.

If compared to the average trading volume of 10.53M shares, GPS reached to a volume of 51350151 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here’s what leading stock market gurus have to say about 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 $12.87 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 2.80. 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.

Morgan Stanley have made an estimate for The Gap Inc. shares, keeping their opinion on the stock as Underweight, with their previous recommendation back on May 27, 2022. While these analysts kept the previous recommendation, JP Morgan raised their target price from $11 to $9. The new note on the price target was released on May 27, 2022, representing the official price target for The Gap Inc. stock. Previously, the target price had yet another drop from $13 to $8, while Citigroup kept a Sell rating on GPS stock.

The Average True Range (ATR) for The Gap Inc. is set at 0.98, with the Price to Sales ratio for GPS stock in the period of the last 12 months amounting to 0.25. The Price to Book ratio for the last quarter was 1.59, with the Price to Cash per share for the same quarter was set at 2.47.

GPS stock trade performance evaluation

The Gap Inc. [GPS] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 6.13. With this latest performance, GPS shares dropped by -9.80% in over the last four-week period, additionally sinking by -33.06% over the last 6 months – not to mention a drop of -65.32% 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 47.04, with the RSI for the last a single of trading hit 50.49, and the three-weeks RSI is set at 45.44 for The Gap Inc. [GPS]. The present Moving Average for the last 50 days of trading for this stock 13.04, while it was recorded at 10.63 for the last single week of trading, and 18.51 for the last 200 days.

The Gap Inc. [GPS]: An insightful look at the core fundamentals

Operating Margin for any stock indicates how profitable investing would be, and The Gap Inc. [GPS] shares currently have an operating margin of +4.79 and a Gross Margin at +39.90. The Gap Inc.’s Net Margin is presently recorded at +1.54.

Return on Equity for this stock inclined to 9.60, with Return on Assets sitting at 1.93.

The Gap Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.50 and a Current Ratio set at 1.30.

Earnings per share (EPS) analysis for The Gap Inc. [GPS] stock

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 -9.40%.

The Gap Inc. [GPS]: Insider Ownership positions

There are presently around $2,455 million, or 58.60% of GPS stock, in the hands of institutional investors. The top three institutional holders of GPS stocks are: DODGE & COX with ownership of 38,361,478, which is approximately 56.638% of the company’s market cap and around 6.80% of the total institutional ownership; VANGUARD GROUP INC, holding 25,362,875 shares of the stock with an approximate value of $294.21 million in GPS stocks shares; and JPMORGAN CHASE & CO, currently with $276.14 million in GPS stock with ownership of nearly -32.163% of the company’s market capitalization.

175 institutional holders increased their position in The Gap Inc. [NYSE:GPS] by around 45,327,221 shares. Additionally, 214 investors decreased positions by around 52,514,795 shares, while 53 investors held positions by with 113,798,299 shares. The mentioned changes placed institutional holdings at 211,640,315 shares, according to the latest SEC report filing. GPS stock had 58 new institutional investments in for a total of 6,671,722 shares, while 82 institutional investors sold positions of 8,662,888 shares during the same period.