Gap (GAP) brands "still need much reinvestment to consistently outperform" following a fiscal Q4 beat in earnings and revenue, UBS Securities said Monday in a report.
Gap management "is showing it is an improved company, but we don't see a catalyst ahead" on improving consumer perceptions of Old Navy, Gap, Banana Republic and Athleta brands, UBS said.
UBS boosted earnings estimates on fiscal year 2025 to 2027 by 11% to 14% after "solid" Q4 results on Thursday. Still, "investors indicate they are less willing than usual to own specialty retail stocks given elevated macro uncertainty," the report said.
UBS lowered its target on Gap stock to $25 from $26 and maintained its neutral rating.
Gap shares fell 2.6% in recent Friday trading.
Price: 22.56, Change: -0.59, Percent Change: -2.57
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