Citi opens ‘positive catalyst watch’ on Gap into earnings

Citi analyst Paul Lejuez opened a “30-day positive catalyst watch” on the shares of Gap while keeping a Buy rating on the name with a $28 price target. The firm anticipates a “big” Q1 earnings beat, driven by stronger Old Navy comps and stronger gross margin. Citi expects Gap to maintain fiscal 2024 sales guidance of down 1% but raise implied earnings per share guidance from $1.30-$1.35 to $1.40-plus. With sentiment more mixed on the shares recently, Gap’s risk/reward is favorable into the Q1 print, the analyst tells investors in a research note.