Back to top

Image: Bigstock

Strength Seen in Gap (GPS): Can Its 8.2% Jump Turn into More Strength?

Read MoreHide Full Article

Gap (GPS - Free Report) shares rallied 8.2% in the last trading session to close at $14.46. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.4% loss over the past four weeks.

Rumors of Gap becoming a target for an activist investor leading to the Athleta brand spin off has send the stock soaring. The Athleta brand has been a key growth driver for a while now driven by its values-driven active and lifestyle categories. Moreover, it remains on track to reach the $2 million milestone.

This clothing chain is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of -89.6%. Revenues are expected to be $3.71 billion, down 7.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Gap, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GPS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Gap is part of the Zacks Retail - Apparel and Shoes industry. Boot Barn (BOOT - Free Report) , another stock in the same industry, closed the last trading session 2.9% higher at $95.26. BOOT has returned 3.7% in the past month.

Boot Barn's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.30. Compared to the company's year-ago EPS, this represents a change of +73.3%. Boot Barn currently boasts a Zacks Rank of #2 (Buy).


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


The Gap, Inc. (GPS) - free report >>

Boot Barn Holdings, Inc. (BOOT) - free report >>

Published in