UPDATE: Canaccord Upgrades Gap Due To Supply Chain Initiatives, New Online Services
In a note released early Wednesday morning, Canaccord analyst Laura Champine upgraded shares of The Gap (NYSE: GPS) from Hold to Buy and raised the price target from $47 to $51.
Champine explained that the upgrade is due primarily to supply-chain initiatives and new online services.
In terms of the supply-chain initiatives, Champine expects the company to be able to reduce costs, shorten lead times, provide a more consistently trendy assortment and drive long-term margin expansion.
Looking to the new online services, Champine believes it will improve traffic and conversion rates online as well as in stores.
Driven by expected long-term margin expansion, Champine is raising her long-term EPS estimates by an average of $0.17 per year.
Following the upgrade, shares of Gap are trading up just under one percent in the pre-market session.
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