The Gap, Inc. operates as an apparel retail company worldwide. It offers apparel, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, Old Navy, Athleta, and Intermix brands. The company was founded in 1969 and is based in San Francisco, California.
GPS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Gap Inc. To summarize, we found that Gap Inc ranked in the 20th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Gap Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is -8.55; that's higher than only 10.62% of US stocks in the Consumer Cyclical sector that have positive free cash flow.
Its compound free cash flow growth rate, as measured over the past 5.47 years, is -0.07% -- higher than merely 16.07% of stocks in our DCF forecasting set.
52% of the company's capital comes from equity, which is greater than merely 21.68% of stocks in our cash flow based forecasting set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GPK, VFC, FTDR, GT, and MCD can be thought of as valuation peers to GPS, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Image source A handful of years ago, I would have counted Gap (GPS) among my favorite retail stocks. The company had strong profitability, a cheap valuation, and a reliable, meaningful dividend stream for investors. The company has gone through its fair share of struggles since then, and today, it is...
Athleta (NYSE: GPS) announced today the expansion of extended sizing ("1X-3X" or sizes 18-26) to 350 styles across its collection. For Spring 2021, 70% of the Athleta collection will be available in sizes 1X-3X.
Athleta (NYSE: GPS) today unveiled its first-ever sleep collection, furthering its growth and reinforcing its position as a true lifestyle brand. Available today, the sleep collection aims to support women holistically and recognizes the importance of rest and recovery in her active life.