.August 21, 2024 12:15:00 PM

Citi analysts reiterated their Buy rating and $32 price target on Gap (NYSE:GPS), predicting a strong second-quarter earnings beat with an EPS forecast of $0.50, exceeding the Street estimate of $0.41.

Anticipating a raise in full-year 2024 sales and EPS guidance to over $1.70, Citi analysts believe Gap will maintain a conservative approach with Q3 guidance around $0.59, following the projected Q2 beat.

Citi analysts foresee continued sales and EPS growth in 2024 for Gap, driven by improved performance from Old Navy and Gap, disciplined expense management, and ongoing gross margin expansion. They also see potential for Gap to reduce promotions in the second half of 2024, despite diminishing product cost tailwinds.