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Gap earns price target boost from TD Cowen

Shares of Gap Inc. (GPS) are gaining Tuesday, buoyed by a price target lift from TD Cowen. Moving from $28 to $30 per share, the firm states that the market currently under-appreciates Gap's earnings growth potential.

Yahoo Finance's Seana Smith and Madison Mills break down the details.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith.

Video transcript

Let's take a look at gap because shares are moving higher after TD Cowan upgraded the stock from hold to buy, raising its price target from 28 bucks a share to 30 bucks.

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So not a huge move to the upside.

We're seeing gains of just under 2%.

The firm saying that the company's earnings growth potential is quote under appreciated.

And I think that has really been the story surrounding gap.

Exactly what gap is going to do in order to get that competitive advantage on terms of some of those near term catalysts to watch the analyst.

There are highlighting Old Navy's improving product assortment, particularly surrounding that important back to school season, obviously very important for uh retailers across the board.

Also collaborations at gap that are going to drive some drive some of that cultural relevance, at least TD Cowan making that argument.

So because of some of those near term catalysts are using that as a reason to upgrade the stock to buy today.

Yeah, and it's not just gap like you mentioned, it's those other names like Old Navy, they're seeing some bullish signs ahead to your point with the product assortment also looking at a letter saying that they think the comp sales numbers are going to improve and that's going to bode well for the second quarter of 2024 see trends in that period improving as the brand introduces newness and going against easy comps in the 3rd and 4th quarters here.

So again, not a huge price target hike, but it is indicative of something that the CEO has spoken about right here with you guys on Yahoo Finance about just the product mix, the transformation that the company continues to go through in terms of its offerings and really finding ways to meet consumers where they are with the types of apparel that they're really looking for this call.

Kind of giving credence to that idea from the Executive Suite as well.