Shares in Gap Inc (NYSE:GPS) continued to churn higher, building on the September sales numbers report which saw improved comparable sales momentum at the retailer’s flagship Old Navy Brand.
Shares closed at $26.85 Wednesday, up 1.09%, with 4.85 million shares traded. The stock is a hair’s breadth away from taking out its previous high of $26.91 on a closing basis.
Gap CFO Sabrina Simmons previously commented regarding Old Navy: “while we remain focused on performance across the portfolio, we are pleased to see a strong customer response to Old Navy’s product assortment, which continues to drive positive momentum at our largest brand.”
Gap Inc (NYSE:GPS) upgraded by Deutsche Bank
Last week, analysts at Deutsche Bank upgraded Gap from a Sell rating to a Hold, citing “comps easing over the next few months, fit and fashion enhancements, and an improved apparel backdrop that includes cleaner inventories, strength in denim, and a more favorable weather outlook.”
Currently, three analysts have a strong buy recommendation on Gap, 15 rated as a hold, one says it is an underperform, while four are in sell mode.
Upside momentum continued amongst apparel retailers yesterday, with stocks such as Nordstrom (+0.74%), American Eagle Outfitters (+0.39%), Abercrombie and Fitch (+1.13%) and Urban Outfitters (+1.01%) keeping in step with Gap.
Technically, Gap Inc (NYSE:GPS) may have turned the corner
Gaps’s sales numbers helped power the stock through the 20, 50 and 200-day moving averages with convincing volume. The 50 day line has already “Golden-crossed” above the 200 day line in September.
If the stock is able to consolidate above the immediate previous high of $26.91, it would establish a pattern of higher highs and lend further conviction to its uptrend.
As Deutsche Bank analyst Paul Trussel said: “While questions around long-term door count & price competition from fast fashion peers will continue, the setup for GPS is more favorable near to medium term, in our view.”