UBS Believes Gap's Second Quarter Off To A Positive Start
In a research note released Friday, UBS analyst Roxanne Meyer commented on Gap's (NYSE: GPS) "positive start" to the second quarter. She believes June will be a "key month" for the quarter.
Meyer compared Gap to the general retail industry. The firm stated that Gap's comps in May puts the retailer in better conditions in these tough retail environments.
In May, Gap achieved comps of +1 percent, principally driven by the growth in the Old Navy brand.
Meyer continued by adding that June is the biggest month in the second quarter. The month of June historically represents nearly 40 percent of the second quarter's sales.
Additionally, UBS stated that Gap has multiple catalysts for margin expansion, and even has the potential to hit $5.00 in earnings per share by 2017.
Some notable risks that were mentioned by the firm include the overall condition of the economy; since it is a specialty retailer, trends in fashion changing and the company's ability to manage inventory levels.
The UBS analyst maintains a Buy rating and $50 price target.
Shares of Gap closed Friday. at $42.06, up 2.1 percent.
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