Jefferies Raises Price Target, Estimates on The Gap (GPS)

Jefferies analysts boosted the price target of The Gap Inc. (GPS) on Monday following a positive meeting with the clothing retailer’s CEO and CFO.

The analysts now see shares of GPS reaching $51, up from the previous target of $50. This new valuation suggests a 40% upside to Friday’s closing price of $36.39. The analysts maintain a “Buy” rating on the company.

“We recently hosted meetings with GPS’s CEO and CFO and come away even more confident in the company’s improving strategic direction and believe this is a multi-year recovery story,” the Jefferies analyst said. “We look for continued sales growth leading to operating leverage, improved returns, higher earnings and a higher stock price.”

Not only did Jefferies boost Gap’s price target, but earning estimates were raised as well. For the first quarter, Jefferies sees EPS at 57 cents, up from the previous 56 cents view. For fiscal 2013, earnings are projected to be be $2.85 per share from $2.80 per share.

Gap shares were up 35 cents, or +0.96%, during morning trading on Monday. The stock is up +44.7% over the past year.

The Bottom Line
Shares of The Gap (GPS) have a dividend yield of 1.65% based on Friday’s closing price of $36.39 and the company’s annualized dividend payout of 60 cents per share.

The Gap Inc. (GPS) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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