stock from Gap Inc. (NYSE: GPS), a specialty retailer that sells casual wear, accessories and personal care products for men, women and children under the Gap
Our forecast indicates that Gap’s valuation is $10 per share, which is 19% lower than the current market price. Check out our interactive dashboard analysis on Gap’s Earnings Preview: what to expect in Q3? for more details.
(1) Revenue is expected to be slightly below consensus estimates
Trefis estimates Gap’s revenue for FQ3 2022 at $3.7 billion, slightly below market expectations. In the second quarter, Gap’s revenue fell 8% year-over-year to $3.86 billion on a 10% decline in comparable store sales. The company’s 8% growth at Banana Republic failed to offset a 15% decline at Old Navy, a 7% decline at Gap, and an 8% slump at Athleta. We expect full year 2022 revenues to decline.
(2) EPS is likely to miss consensus estimates
Gap’s FQ3 2022 earnings per share is expected to come in at a loss of 6 cents per Trefis analysis, missing the consensus estimate. Adjusted net income was down 89% yoy to $30 million, or $0.08 per share in the second quarter.
(3) Estimated share price lower than the current market price
Based on our Gap’s Valuation, with an adjusted EPS estimate of $1.36 and a P/E multiple of 7.0x in fiscal 2022, this translates into a price of $10, which is 19% lower than the current market price.
It’s helpful to see how his peers are doing. GPS Peers shows how Gap’s share compares to peers on metrics that matter. Other useful comparisons for companies in different sectors can be found at Peer Comparisons.
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