Jan. 8 at 8:45 PM
Gap shares jumped after UBS upgraded the stock to Buy from Neutral and raised its price target to
$41 from
$26, citing growth opportunities in beauty and handbags and improving performance at Athleta. The upgrade sent the stock up nearly 8%, putting it on track for its highest close in more than four months.
UBS analyst Jay Sole said Gap’s turnaround is gaining traction, pointing to eight consecutive quarters of positive comparable sales at Gap and Old Navy. He views beauty and accessories as underpenetrated categories, with UBS forecasting
$75 million in sales in 2026, rising to
$535 million by 2028. Sole also expects Gap to become a strong player in mid-priced handbags.
Athleta is seen as another source of upside, with stable brand awareness and potential for a turnaround using Gap’s proven brand reinvigoration strategy. UBS projects mid-single-digit revenue growth at Athleta by the second half of 2026, despite recent sales declines.
$GAP