Gap Shoots Higher In After Hour Trading After A Solid Q4 Earnings Beat – CWEB.com

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Gap Shoots Higher In After Hour Trading After A Solid Q4 Earnings Beat – CWEB.com

Old Navy Global led the way again, with comparable sales up 9% during the quarter. Banana Republic turned in a +1% comp, while sales were flat for the Gap brand.

Gross margin was 33.7% of sales. Operating income was 7.2% of sales.

Looking ahead, Gap expects comparable sales to be flat to up slightly and EPS to fall in a range of $2.55 to $2.70.

Shares of Gap are up 7.22% AH to $33.99.

Gap, Inc. (NYSE:GPS) Q4 2017 Earnings Call March 1, 2018 5:00 PM ET

Executives

Tina Romani – Gap, Inc.

Arthur L. Peck – Gap, Inc.

Teri L. List-Stoll – Gap, Inc.

Analysts

Randal J. Konik – Jefferies LLC

Matthew Robert Boss – JPMorgan Securities LLC

Ike Boruchow – Wells Fargo Securities LLC

Lorraine Corrine Hutchinson – Bank of America Merrill Lynch

Chethan Bhaskaran Mallela – Barclays Capital, Inc.

Oliver Chen – Cowen & Co. LLC

Brian Jay Tunick – RBC Capital Markets LLC

Shares are trading at a 50% discount to the overall market.

The dividend has grown an average 10.5% per year over the last six years.

GPS stock has rallied big recently.

Investors like the company’s long-term plan to optimize real estate and take costs out of the system.

Gap is a well-diversified apparel company that is showing clear signs of a turnaround after the negative performance of the last few years.

The stock is trading at cheap multiples, despite the recent positive performance and the expectations of a return to growth already next year.

The solid balance sheet, the healthy cash flows, the good dividend yield, the depressed multiples and the recent guidance are enough to place a bet on this turnaround play.

CWEB Analyst have initiated a Buy Rating for (NYSE:GPS ) and a Price Target of $60 within 12 months.

 

 

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