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Gap Stock Pops After Morgan Stanley Upgrade as Headwinds are Mostly Priced In -Breaking

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© Reuters. Following a Morgan Stanley Upgrade, Gap (GPS Stocks Populates as Headwinds Are Mostly Priced in

Morgan Stanley analyst Kimberly Greenberger elevated shares of Gap Inc. (NYSE:) from Equal Weight to Underweight, with an unchanged price target at $14.00 per share

According to the analyst, concerns that caused MS to drop to Underweight were largely priced in. This is mostly due to uncertainty in turnaround, weak execution and optimistic guidance for 2022EPS.

Greenberger remains pessimistic, but notes that shares have fallen more than 20% year-to-date.

“While our concerns remain, with the stock nearing 5Y lows (ex-Covid) & our 2022e EPS estimate sitting nearly 70% below both consensus & the midpoint of guidance, we see limited room for further downside near-term & move to the sidelines. GPS continues to be a challenge. The retailer is in ‘show-me’ turnaround mode, with potentially optimistic near-term targets in light of ON mis-execution, ongoing freight headwinds, operating cost inflation, & y/y merchandise margin giveback risk,” Greenberger said in a client note.

GAP stocks are almost up 2% since pre-open Monday

By Senad Karaahmetovic

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