Market Overview

Yeezy Deal A Traffic Driver For The Gap, RBC Says In Upgrade

Yeezy Deal A Traffic Driver For The Gap, RBC Says In Upgrade

Gap is a relative outperformer with catalysts ahead, according to RBC Capital Markets. 

The Gap Analyst: Kate Fitzsimmons upgraded The Gap from Sector Perform to Outperform with a price target lifted from $13 to $18. 

The Gap Takeaways: Fitzsimmons named the following as Gap catalysts that the analyst said could unlock value in the stock. 

  • Fall 2020 analyst day.
  • 2021 Yeezy Gap Launch.
  • Productivity stabilization and fixed cost reduction efforts.

After six consecutive years of negative comps for the Gap brand, the analyst said new members of management are trying to find ways to “inject much needed excitement.”

Crossover sales between the Yeezy and Gap brands should drive traffic, and "Gap sees a halo from West's already elevated basics focus," Fitzsimmons said. 

Yeezy Gap could represent $2-$5 per share in the next few years, the analyst said. 

GPS Price Action: Gap shares were trading 8.87% higher at $12.15 at the time of publication Wednesday. 

Photo courtesy of The Gap. 

Latest Ratings for GPS

Sep 2020UBSMaintainsNeutral
Sep 2020Morgan StanleyMaintainsEqual-Weight
Aug 2020B of A SecuritiesUpgradesUnderperformNeutral

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