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Analysts Say The Gap Missing The Mark On 'Color And Style'

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Analysts Say The Gap Missing The Mark On 'Color And Style'
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Although Gap Inc (NYSE: GPS) appears to be on track in the current quarter, there needs to be “more fashion excitement before we start to view the company favorably,” BMO Capital Markets’ John D. Morris said in a report. He maintained a Market Perform rating on the company, with a price target of $20.

Gap began the quarter with a higher degree of promotional activity, before controlling its markdown activity, indicating that the company is on track this quarter, analyst John Morris said.

Gap Brand

Gap’s new buying team seems to have been conservative with their trends, “missing on both color and style in the spring,” Morris wrote.

Old Navy Brand

Promotional activity was high at Old Navy during the beginning of the quarter. “Our merchant field team tells us that, similar to Gap, Old Navy’s products lack direction and the offering lacks focus,” the analyst added.

Stock Performance

The relative performance of Gap’s stock declines while markdown levels remain high. Morris said that the company would need to achieve better on-trend product and lower markdown activity for before the stock’s underperformance can be expected to begin to reverse.

Latest Ratings for GPS

DateFirmActionFromTo
Nov 2016PiperJaffrayUpgradesUnderweightNeutral
Nov 2016CitigroupDowngradesNeutralSell
Oct 2016Deutsche BankUpgradesSellHold

View More Analyst Ratings for GPS
View the Latest Analyst Ratings

Posted-In: BMO Capital Markets John D. MorrisAnalyst Color Reiteration Analyst Ratings Best of Benzinga

 

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