Why Is Gap Stock Rising In Premarket Today?

• Gap is expected to report an over 18% decline in adjusted profit, according to analyst estimates; revenue is seen rising 2%.
• At least two brokerages recently upgraded Gap’s stock to the equivalent of a ‘Buy’ rating.
• Stocktwits sentiment for GAP was ‘bearish.’

Shares of apparel retailer Gap Inc. rose 1.3% in early premarket trading on Thursday, tracking gains in the broader futures, ahead of the company’s quarterly report scheduled to be released in post-market hours.

Analysts have high expectations from the fashion retailer; Barclays and Jefferies upgraded their ratings on the stock to the equivalent of ‘Buy’ in the last few days. Barclays praised the “disciplined leadership strategy” under CEO Richard Dickson, which it believes is driving a durable recovery across Gap’s key brands, including Old Navy and Banana Republic.

Dickson, who took the helm at Gap in August 2023, is known for turning around Mattel, the toy maker behind Barbie dolls and Hot Wheels cars.

Jefferies analysts see “significant upside” in Gap’s beauty segment—an opportunity they say Wall Street is underestimating—while also pointing to early signs of a turnaround at both the Gap and Old Navy brands.

According to consensus estimates from Koyfin, analysts expected Gap’s revenue to increase 2% to $3.9 billion. That would be the second time in the last five quarters that topline growth was 2% or higher.

However, adjusted earnings per share (EPS) are expected to decline by over 18% to $0.59. Notably, the company raised its forecast for tariff-related costs in the current fiscal year in August.

On Stocktwits, the retail sentiment for the company’s stock inched down multiple points into the ‘bearish’ zone compared to the previous day. As of the last close, GAP is down 0.6% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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