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How Investors Are Reacting To Gap (GAP) Analyst Upgrades Tied To Tariff Mitigation Progress

Simply Wall St · 2d ago
  • In recent days, Gap Inc. has attracted a wave of analyst upgrades, as firms such as Telsey Advisory, Wells Fargo, and Baird highlighted stronger brand momentum, improving margins, and progress in mitigating tariff pressures across its portfolio.
  • Analysts have pointed to Old Navy’s outsized contribution, successful marketing campaigns, and early benefits from tariff mitigation as key reasons for their renewed confidence in Gap’s business trajectory.
  • We’ll now explore how this cluster of analyst upgrades, anchored in Gap’s tariff mitigation progress, reshapes the company’s existing investment narrative.

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Gap Investment Narrative Recap

To own Gap today, you need to believe its core brands, especially Old Navy, can keep carrying modest growth while tariff headwinds are contained and margins hold up. The latest wave of analyst upgrades reinforces brand momentum and tariff mitigation as the key short term catalyst, but it does not eliminate the structural risks around tariffs, uneven brand execution at Athleta, or potential reliance on promotions if demand softens.

The most relevant development is Telsey Advisory’s upgrade to “Outperform,” tied directly to stronger brand positioning and a clearer path on tariff mitigation, with benefits expected to build from the second quarter of next year. That aligns with the existing catalyst around cost structure improvement and margin expansion, but investors still have to weigh this against issues like elevated inventories and the risk that only a handful of brands are driving most of the growth.

Yet beneath the bullish tariff narrative, investors should also be aware that...

Read the full narrative on Gap (it's free!)

Gap’s narrative projects $16.0 billion revenue and $956.2 million earnings by 2028. This requires 1.8% yearly revenue growth and about a $67 million earnings increase from $889.0 million today.

Uncover how Gap's forecasts yield a $28.65 fair value, a 5% upside to its current price.

Exploring Other Perspectives

GAP 1-Year Stock Price Chart
GAP 1-Year Stock Price Chart

Eight Simply Wall St Community fair value estimates for Gap span roughly US$19 to US$29.12, showing how differently private investors price the same set of fundamentals. As you weigh those views against the recent analyst upgrades centered on tariff mitigation and brand momentum, it is worth considering how sensitive Gap’s performance remains to future tariff policy and category level demand shifts.

Explore 8 other fair value estimates on Gap - why the stock might be worth as much as 7% more than the current price!

Build Your Own Gap Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your Gap research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
  • Our free Gap research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Gap's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.