Gap Shares Jump after Citi’s Positive Forecast

Clothing retail giant Gap sees spike in shares after Citi doubled its price target to $24 per share. This upgraded the stock from a Neutral to a Buy rating.

The new target translates to a 54.8% increase from an analyst price target of just $12.02. The increase is the highest recorded by the firm in the last six months.

Noting the untapped potential of Athleta’s brand value, the rising rival of Lululemon, Citi pegged it at $3.6 billion on a standalone basis for a midpoint value estimate.

Calculations for 2021 fiscal sales may reach $1.2 billion with the growing popularity of athleisure.

Gap shares were up 9%, now at $16.89. Its current enterprise value is steady at $6.5 billion.

After the canceled plan to make a spinoff for Old Navy, Citi cited that this time might be the right time for an Athleta spinoff.

The activewear retail has an expansive room for growth along with few other athletic brands, experts say.

Insiders also said that there is evidence that Athleta’s board is considering corporate actions, including a spinoff.

Face Mask Pivots Gap Inc. Sales

Gap Inc.’s face mask brought a significant amount of new cash into its cash registers together with the clothing the firm produces.

It recorded an impressive $130 million in sales during the period.

Early in the pandemic, city and state mandates required the mandatory wearing of face masks to curb the spread of COVID-19.

The measure is an added layer of protection against infection that can be transmitted through respiratory droplets and suspended on the air for a certain period.

The retailer giant capitalized on the opportunity. It made a supply chain to make face masks when supplies fell short of demand.

Since then, Gap became the leading search result on Google for “face mask style guide,” signifying its popularity in the segment.

Its bulk customers came from COVID hotspots, such as California and New York.