GPS - The Gap's Brands Perform Stronger Than I Thought (Rating Upgrade)

2024-07-16 17:31:38 ET

Summary

• The Gap, Inc.'s Q1 results blew Wall Street estimates and my expectations out of the water, also raising the FY2024 outlook.
• The Gap's brands are performing strongly, and while I was previously cautious of the brands' turnaround success, a better sales performance seems likely now.
• The stock has gone from moderately overvalued to slightly undervalued in my eyes, as Gap's stock price is stagnant since my previous article despite the strong Q1.

The Gap, Inc. ( GPS ) reported Q1 results, blowing Wall Street analysts’ and my estimates out of the water. This made the shares rally by 29% following the results, as all of Gap’s brands showed signs of clearly improving demand....

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