GAP (NYSE:GAP) Shares Gap Up on Earnings Beat

The Gap, Inc. (NYSE:GAP)’s stock price gapped up before the market opened on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $20.79, but opened at $24.69. GAP shares last traded at $23.80, with a volume of 7,810,732 shares.

The company reported $0.52 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.48 by $0.04. GAP had a return on equity of 21.13% and a net margin of 6.25%.The business had revenue of $3.65 billion for the quarter, compared to the consensus estimate of $3.69 billion. During the same quarter in the prior year, the business posted $0.57 earnings per share. The firm’s quarterly revenue was down 2.0% compared to the same quarter last year. GAP has set its FY 2026 guidance at 2.350-2.450 EPS.

GAP Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, October 28th. Stockholders of record on Wednesday, October 7th will be issued a dividend of $0.175 per share. This represents a $0.70 annualized dividend and a dividend yield of 2.9%. The ex-dividend date of this dividend is Wednesday, October 7th. GAP’s dividend payout ratio is 27.56%.

Key Headlines Impacting GAP

Here are the key news stories impacting GAP this week:

• Positive Sentiment: Old Navy leadership shake-up: Gap appointed retail veteran Michael Francis, formerly associated with Walmart and Target, as Old Navy’s president and CEO effective November 2. Investors appear optimistic that his experience can address the brand’s weak sales and improve execution. Gap shares jump after Old Navy brings in new CEO to revive brand
• Positive Sentiment: Profit beat and higher EPS outlook: Second-quarter adjusted earnings were $0.52 per share, exceeding the $0.48 consensus estimate. Gap raised its fiscal 2026 EPS guidance to $2.35-$2.45, above the $2.33 analyst consensus, helped by gross-margin expansion and strength at the namesake Gap brand. Gap lifts annual profit forecast on strength of namesake brand
• Positive Sentiment: Analyst support: BTIG raised its price target from $26 to $27 and maintained a Buy rating. Bank of America also lifted its target to $27, although it retained a Neutral rating. The new targets imply substantial upside from the referenced $20.84 price. Analyst price-target updates
• Neutral Sentiment: Banana Republic and the namesake Gap brand reportedly performed better than expected, while the company continues emphasizing reduced discounting and marketing partnerships, including Hailey Bieber, to support brand momentum. Gap’s new playbook: Less discounting, more Hailey Bieber
• Negative Sentiment: Sales remain pressured: Quarterly revenue fell 2% year over year to $3.65 billion, below the $3.69 billion consensus, and comparable sales declined 1%. Old Navy was the primary weakness, prompting the CEO replacement; full-year revenue guidance of approximately $15.6 billion is also slightly below expectations. Gap announces new Old Navy CEO following sluggish quarterly sales

Analyst Upgrades and Downgrades

A number of research analysts recently commented on GAP shares. TD Cowen dropped their price target on GAP from $26.00 to $23.00 and set a “buy” rating for the company in a research note on Tuesday, August 18th. Barclays set a $23.00 price objective on shares of GAP in a research note on Friday. Morgan Stanley reissued an “equal weight” rating and issued a $21.00 target price on shares of GAP in a report on Monday, July 6th. The Goldman Sachs Group dropped their target price on shares of GAP from $28.00 to $25.00 and set a “buy” rating for the company in a research report on Thursday, August 20th. Finally, UBS Group reaffirmed a “buy” rating and set a $42.00 price target on shares of GAP in a report on Friday. Two research analysts have rated the stock with a Strong Buy rating, five have issued a Buy rating, ten have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, GAP currently has a consensus rating of “Hold” and a consensus price target of $26.79.

Institutional Trading of GAP

Several institutional investors and hedge funds have recently modified their holdings of the business. BlackRock Inc. acquired a new stake in GAP in the second quarter valued at about $428,824,000. California State Teachers Retirement System raised its stake in GAP by 1,732.5% during the second quarter. California State Teachers Retirement System now owns 5,116,415 shares of the company’s stock worth $95,575,000 after acquiring an additional 4,837,214 shares in the last quarter. Bank of America Corp DE bought a new position in shares of GAP in the second quarter worth about $30,345,000. Ameriprise Financial Inc. lifted its holdings in shares of GAP by 42.7% in the second quarter. Ameriprise Financial Inc. now owns 4,407,809 shares of the company’s stock worth $96,134,000 after acquiring an additional 1,318,322 shares during the last quarter. Finally, Miller Howard Investments Inc. NY boosted its stake in shares of GAP by 112.2% in the 1st quarter. Miller Howard Investments Inc. NY now owns 1,704,021 shares of the company’s stock valued at $41,237,000 after purchasing an additional 900,855 shares in the last quarter. 58.81% of the stock is currently owned by institutional investors.

GAP Trading Up 14.8%

The company has a market capitalization of $8.59 billion, a price-to-earnings ratio of 9.39, a P/E/G ratio of 1.25 and a beta of 2.05. The company has a current ratio of 1.81, a quick ratio of 1.08 and a debt-to-equity ratio of 0.41. The business’s 50 day moving average price is $20.01 and its two-hundred day moving average price is $22.87.

About GAP

Gap Inc is a global specialty retailer renowned for its portfolio of apparel and accessories brands, including Gap, Banana Republic, Old Navy and Athleta. The company designs, sources and markets clothing across a broad price range and style spectrum, catering to men, women and children. Its offerings extend from everyday wardrobe essentials such as denim, tees and outerwear to performance and lifestyle pieces, reflecting each brand’s distinct identity and price point.

Founded in San Francisco in 1969 by Donald and Doris Fisher, Gap Inc has grown into one of the world’s largest apparel companies.