Is Wall Street High Or Low On The Gap Inc. (GPS)?

The Gap Inc. (NYSE:GPS) finished Tuesday with a subtraction of -$0.15 to close at $23.74, a downside of -0.63 percent. An average of 12,195,620 shares of common stock have been traded in the last five days. There was a fall of -$0.86 in the past week. The last 20 days have seen an average of 8,404,745 shares traded, while the 50-day average volume stands at 7,631,798.

GPS stock has decreased by -5.46% in the last month. The company shares reached their 1-month lowest point of $22.57 on 10/01/21. With the stock rallying to its 52-week high on 05/18/21, shares of the company touched a low of $18.30 and a high of $37.63 in 52 weeks. In spite of this, the price is down -36.91% from the 52-week high.


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Insider Transactions

47 days have passed since The Gap Inc. (GPS) last reported insider trading activity. Syngal Sonia, who is CEO Gap, Inc., most recently acquired $22,520 shares at $27.45 per share on Aug 20. In this transaction, the insider spent $618,286. CEO Gap, Inc., Syngal Sonia, disposed of 22,641 shares at a price of $29.61 on Aug 13. The insider now owns more than $670,344 worth of shares. Prior to that, EVP CFO O’Connell Katrina went on to Sale 65,271 shares at $30.00 each on Aug 10. An amount of $1,958,130 was transacted.

Valuation Metrics

The Gap Inc. (GPS) has a trailing price-to-earnings (P/E) ratio of 14.41, which compares with the 21.00 for the broader industry and 19.93 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, The Gap Inc.’s PE ratio has ranged between 32.44 and 5.978. The stock’s beta is 1.64. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.52, the price-to-book (PB) ratio at 2.97, and the price-to-cash flow ratio at 16.35.

The Gap Inc. will next go ex-dividend on 7-Jan. The next dividend payment The Gap Inc. will make is expected to be $0.12.

The quick ratio of The Gap Inc. for the three months ended July 30 was 1.10, and the current ratio was 1.70, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.74 and a total debt to equity ratio of 0.00 for the quarter ending July 30. On the profitability front, the trailing 12-month gross margin is 40.60% against a 5-year average of 36.9%. The Gap Inc.’s EBITDA margin for the year ending July 30 is 1.42%, while its operating margin for the same period stands at 5.80%. Its gross profit as reported stood at $4.71 billion compared to revenue of $13.8 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, The Gap Inc.’s return on assets was 5.40%, compared to 6.1% over the last five years. In the past year, the return on investment has been -12.50%, and the 5-year average is 11.9%. Meanwhile, the return on equity (ROE) for the past 12 months has been 27.90% and the 5-year average holds at 14.1%. For the broader industry, ROE averaged 10.33 over the past year.

Technical Picture

From a technical analysis perspective, let’s take a brief look at The Gap Inc. (GPS) price momentum. RSI 9-day as of the close on 05 October was 44.47%, suggesting the stock is Neutral, with historical volatility in this time frame at 53.14%.

As of today, GPS’s price is $23.72 -3.50% or -$0.86 from its 5-day moving average. GPS is currently trading -4.62% lower than its 20-day SMA and -29.13% lower than its 100-day SMA. However, the stock’s current price level is -20.87% below the SMA50 and +14.41% above the SMA200.

The stochastic %K and %D were 32.77% and 26.93%, respectively, and the average true range (ATR) was 1.00. With the 14-day stochastic at 32.96% and the average true range at 1.01, the RSI (14) stands at 42.37%. The stock has reached -0.25 on the 9-day MACD Oscillator while the 14-day reading was at -0.21.

Analyst Ratings

Deutsche Bank reiterated its a Buy rating on The Gap Inc. (NYSE: GPS), but raised their price target to $42, indicating a potential price increase of 76.92% for the stock.The consensus rating for The Gap Inc. (GPS) among analysts is Hold. According to current brokerage recommendations, 0 brokerage firms advise that investors sell GPS, while 17 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 4 others rate it as a “buy”.

What is GPS’s price target for the next 12 months?

Analysts predict a range of price targets between $27.75 and $45.00, with a median target of $33.00. Taking a look at these predictions, the average price target given by analysts for The Gap Inc. (GPS) stock is $34.31.

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