Major Bank Ratings | UBS: Raises Gap Target Price to $41, Upgrades Rating to "Buy"

Glonghui January 9｜UBS stated that, with improving business momentum, it has upgraded Gap’s rating from “Neutral” to “Buy,” and raised its 12-month target price from $26 to $41. Analyst Jay Sole believes that the revenue growth of Gap’s Athleta brand is improving, and that Gap’s strategies to promote its beauty and handbag businesses are beginning to bear fruit, which will drive faster growth in sales and profits. He pointed out that Gap is making the right investments to expand its beauty and handbag businesses, and the market is underestimating the potential in these areas, expecting that these businesses will help improve the group’s gross margin. He expressed confidence in Athleta’s new management team, believing it will help revitalize the brand. In addition, the analyst also mentioned increased confidence in Old Navy and Gap’s core businesses, stating that, even though some investors are concerned about weak holiday sales, actual performance remains resilient.