Financial Trading Blog
Stock of the day 17/08/2016 – Gap Inc
Following 2015’s deep decline 2016 won’t have reassured investors about Gap’s stability. Rising to a year, and 6 month, peak of $30.49 towards the end of March the stock had plunged all the way to $17 by the middle of May, only to climb back to a current trading price of $25.15 (IT-Finance.com, 17/08/2016).
(Source: IT-Finance.com 17/08/2016)
Most of Gap’s movement this year has stemmed from its monthly updates, with the fashion retailer seeing a 14% market-slide in January, a 14% fall in April and an 11.5% dive in May as sales consistently decreased. Unsurprisingly, then, mid-May’s first quarter report didn’t make for pleasant reading. Though EPS of 32 cents and revenue of $3.44 billion were both in line with expectations, and the 5% like-for-like sales slide was lower than the 7% forecast, it still paints a picture of a company in trouble, Gap suffering from the same slowing footfall as its other department store peers.
It’s most recent monthly report came on August 8th, with Gap once again shocking the markets (and sparking a 6.2% fall) with its sales decline. Across July like-for-likes slid by 4%, far worse than the 1% estimated by analysts, and signalling that the company may be missing out on the usual back-to-school shopping boost.
In terms of the Q2 update on Thursday, analysts are expecting Gap to post a 7.8% dip in earnings per share to 59 cents off the back of a 2.8% fall in revenue to $3.79 billion.
Gap Inc has a consensus rating of ‘Hold’ with an average target price of $25.15.
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