(CercleFinance.com) – Wells Fargo announced on Friday that it had raised its price target on Gap shares, from 16 to 20 dollars the day after the publication of the ready-to-wear group’s quarterly accounts.
Despite high expectations, the clothing specialist delivered the most impressive performance of the entire earnings season in the United States, the Californian bank argues in a note.
Although the bar was very high due to the recent burst of optimism that gripped the stock, Gap managed to exceed the highest market forecasts, continues Wells Fargo.
If the American firm particularly remembers the performance of the Old Navy brand, it emphasizes that the flagship brand Gap also did much better than expected, which shows that the establishment of a new management team ‘already starting to bear fruit’.
Due to a base effect which looks favorable, this inflection point constitutes a key element for the stock, concludes the bank, which believes that this situation gives rise to increased visibility on the upward potential of the stock.
Wells Fargo – which has an ‘overweight’ recommendation on Gap – says it still makes the value its preferred value (‘top pick’) within the sector.
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