Can Gap Stock Rebound After A 12% Decline In A Month?

GPS: Gap logo

Gap’s stock (NYSE: GPS), a specialty retailer selling casual apparel, accessories, and personal care products for men, women, and children under the Gap, Old Navy, and Banana Republic brands, has declined 12% over the last twenty-one trading days (one month) and currently stands at around $29. It should be noted that the broader S&P500 returned a 3% growth during the same period. There has been a major shift in the U.S. Covid-19 guidance as the country struggles to suppress the Delta Variant. The number of cases is swelling, with this variant reportedly causing 90% of them. So, the Centers for Disease Control and Prevention (CDC) has recommended wearing masks again indoors in high-risk places, even for those who are fully vaccinated.

There is also speculation emerging that Gap might want to spin off its Athleta brand following news of the workout apparel brand Fabletics hiring advisors in preparation for an initial public offering. Now, is GPS stock poised to decline further? We believe the company remains fundamentally undervalued and there could be room for gains in the stock going forward. Specifically, there is a 55% chance of a rise for GPS stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on GPS Stock Chances of Rise for more details.

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Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last 10 year data

[1] -2.6% or higher return during five-day period in 550 times out of 2517; Stock rose in the next 5 days in 297 of these 550 instances

[2] -7.4% or higher return during ten-day period in 303 times out of 2517; Stock rose in the next 10 days in 157 of these 303 instances

[3] -12% or higher return during twenty-one-day period in 232 times out of 2516; Stock rose in the next 21 days in 127 of these 232 instances

It is helpful to see how its peers stack up. GPS Stock Comparison With Peers to see how Gap compares against peers on metrics that matter.

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