Piper Jaffray Says Gap's Share Buyback Will Fuel EPS Growth
November 20, 2009 9:10 AM
Piper Jaffray maintains a Neutral Rating on The Gap Inc. (NYSE: GPS) at a price target of $24. Jaffray feels that GPS outlook for the top line growth will be partially offset by its spending related to brand marketing. Moreover, the analyst expects that Gap’s ongoing share buyback will help in the EPS growth.
The Gap Inc has also reduced its fixed operating expense by around 15% or $700 million in the last two years and has achieved merchandise margin gains as a result of strategic initiatives taken too leverage scale and reduce markdowns.
GPS declined 1.37% to $21.55 in the pre-market session. Yesterday, GPS closed at $21.86.
GPS has a 52-week trading range of $ 9.41 - $23.36. Till now during the current calendar year, the stock has surged over 63%.
