UPDATE: Jefferies Raises PT to $40 on The Gap

Jefferies increases its price target from $37 to $40 on Buy-rated The Gap

following meetings with the management that boosted confidence in the company's strategic direction. Jefferies says, "We like that supply is being rationalized, higher return businesses (online) are being focused on, int'l expansion is being smartly managed in a capital light manner, and the product/design process is improving. Bottom line, despite this progress GPS is under-appreciated and under-owned and remains our top pick." GPS closed at $25.96 on Thursday.