It’s Time to Stop Overlooking The Gap, Inc. (GPS)

Analysts at Telsey Advisory Group lifted target price for shares of The Gap, Inc. (NYSE:GPS) but repeated their Outperform recommendation for the stock in their opinion released on November 21. The price target has been raised from $39 to $34. B. Riley FBR analysts again handed out a Neutral rating to GPS stock but they lifted target price for the shares in a flash note to investors on November 21. The price target has been raised from $33 to $30. B. Riley FBR, analysts launched coverage of GPS stock with a Neutral rating, according to their flash note to investors on November 21.

By watching the trading activity of corporate insiders, it will become easier to get a sense of The Gap, Inc. (NYSE:GPS)’s prospects. The earliest insider trade took place on 06/19/2018. Fisher William Sydney parted with a total of 1 million shares of company at average share price of $32.37. The total for the sales was set at $32.37 million. After this transaction, the Director, 10% Owner account balance stood at 37.91 million shares. The stock lost -22.03 percent since that insider sale. On 04/04/2018, Fisher Robert J, Director, 10% Owner, sold 500 thousand shares at a price per share of $31.28. This removed 15.64 million shares from the insider’s fortune and the stock saw a -19.31 percent retreat in value since the news became public. This transaction left 37.88 million shares in the Director, 10% Owner account. On 04/03/2018, VP & Chief Accounting Officer Bazzano Dara performed a sale transaction worth $15.76 thousand. This sale at $31.02 each has eliminated 0.51 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -18.63 percent decrease since the transaction was reported. The insider now is left with 0 thousand shares remaining in the account. Fisher William Sydney, who performs the Director, 10% Owner job, sold 500 thousand shares for $16.05 million. The disposal occurred on 03/22/2018 was priced at $32.1 per share. The share price plunged -21.37 percent since the reporting date. Fisher William Sydney now left with a stake of 38.92 million GPS stock worth $982.39 million after the insider selling.

The Gap, Inc. (GPS) is expected to jump by 16.68 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $50-month high price target. This represents a whopping 98.1 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $28, which represents a return potential of 10.94 percent when compared to the closing price of the stock of $25.24 on Friday, January 11. The lowest price target for the stock is $24 — slightly more than -4.91 percent from GPS’s current share price.

The shares are currently floating around the first support level of $24.67. Below this, the next support is placed in the zone of $24.1. Till the time, the GPS stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 44.26 on daily chart, which may remain a cause for concern. If the price breaks below $24.1 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $25.64 mark may result into a pull-back move towards $26.04 level.

GPS shares dropped -0.01 points or -0.04 percent on Friday to $25.24 with a light trade volume of 4.509 million shares. After opening the session at $24.65, the shares went as high as $25.47 and as low as $24.5, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $9.63 billion and now has 381.58 million shares outstanding. The Gap, Inc. (GPS) stock has lost -7.03 percent of market value in 21 trading days.

GPS stock has a trailing 3-year beta of 0.65, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.47 a share in the trailing twelve months. The stock’s value has fallen -2.02 percent year to date (YTD) against a decline of -21.2 percent in 12 month’s time. The company’s shares still trade -29.26 percent away from its 1-year high of $35.68 and 4.08 percent up from 52-week low of $24.25. The average consensus rating on the company is 3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Shares of The Gap, Inc. (GPS) are trading at a P/E ratio of 10.7 times earnings reported for the past 12 months. The industry GPS operates in has an average P/E of 30.76. Its P/E ratio went as low as 11.1X and as high as 14.41 over the 5-year span. Further, it is sporting a 0.58 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2. 38.5 percent is the gross profit margin for The Gap, Inc. and operating margin sits at 8.3 percent. Along with this, the net profit margin is 5.6 percent.