Analyst Richard Jaffe said his confidence in the company is undermined by the prolonged outperformance at the Gap business, rendering the visibility for improvement limited. The analyst also expressed doubts regarding the ability of the aggressive cost cutting and business rationalization plan to help improve the appeal or long term success of the various Gap brands.
Citing limited visibility for improvement in the fundamentals of the business, the firm reiterated its Neutral rating. The firm's $25 fair value price is based on 12 times its 2017 earnings per share estimate of $2.05.
At time of writing, shares of Gap were up 15.06 percent at $26.20.
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