Why We Lowered Our Price Estimate For Gap Inc By 30%

-26.81%
Downside
24.69
Market
18.07
Trefis
GPS: Gap logo
GPS
Gap

  • Gap Inc’s shares have been on a down-slide for the last one-and-a-half months following the release of its April sales results.
  • We have lowered our price estimate for Gap by 30% by pulling back its revenue forecast and the terminal growth rate.
  • The company recently announced that it plans to close 53 Old Navy stores in Japan and correspondingly, we’ve lowered the forecast for its store count.
  • We have also reduced the terminal growth rate for the company from 1% to 0.1%, considering that we forecast Gap Inc’s free cash flow to decline until 2022.  Morever, any recovery thereafter is likely to be marginal.

corrected gap inc price revision

Gap Inc Price Estimate Revision part 2

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  1. Does Gap Stock Have More Room To Run After Rising 67% This Year?
  2. Gap Q2 Earnings: What Are We Watching?
  3. Gap Stock Has Upside Potential To Its Pre-Inflation Peak
  4. Gap’s Stock Looks Expensive At $14
  5. Will Gap Stock Trade Lower Post Q3 Results?
  6. Gap’s Q2 Earnings Preview: What Are We Watching?

Have more questions about Gap Inc? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Gap Inc
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