What Analysts Think of Gap Stock Ahead of Earnings

Key Takeaways

• The Gap is set to report third-quarter earnings after the closing bell on Thursday.
• A majority of analysts tracked by Visible Alpha have a buy rating for the company's stock.
• Last quarter, the retailer beat expectations and raised guidance based on higher sales at its Gap and Old Navy stores. Analysts are looking for modest revenue growth and a drop in EPS.

The Gap (GAP) will report third-quarter earnings after the market closes on Thursday, and analysts are predominantly bullish on the clothes retailer. 

Of the eight brokers polled by Visible Alpha, five have a buy or equivalent rating for the company’s stock, compared to two hold ratings and one sell rating. The consensus price target is $27, which is a more than 25% premium to Monday's closing price.

During its second quarter, the company beat expectations due to higher sales at its Gap and Old Navy stores and raised its guidance.

This quarter, analysts are calling for revenue to grow 1% year-over-year to $3.81 billion and earnings per share to slide slightly to 55 cents from 58 cents.

Shares of Gap moved less than 1% lower Monday and are up about 5% this year.

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