From Yahoo Finance: 2025-05-30 15:21:00

Goldman Sachs analyst Brooke Roach reiterated a Buy rating on Gap, Inc. and raised the price forecast from $25 to $28. The firm reported first-quarter earnings of 51 cents per share, beating the consensus estimate of 45 cents. Quarterly revenue exceeded expectations at $3.46 billion.

Despite strong core business trends, Gap acknowledged a larger-than-expected tariff headwind of $100-150 million in the second half. The company aims to reduce exposure to China and diversify its sourcing strategy. By the end of 2026, Gap plans to ensure no single country accounts for more than 25% of its sourcing.

Gap estimates an unmitigated tariff impact of $250-300 million, which could be reduced to $100-150 million through mitigation efforts. The company is using various levers to mitigate risks without raising prices. Despite uncertainty, Gap is investing in strategic initiatives and growth plans.

Analyst Brooke Roach revised Gap’s EPS estimates for 2025, 2026, and 2027 to $2.19, $2.34, and $2.61, respectively. The update reflects Gap’s strong Q1 performance and management’s latest tariff guidance. Gap shares are trading lower by 18.2% at $22.87, impacted by higher-than-expected tariff headwinds and near-term stock performance concerns.

Read more: GAP Flags Over $100 Million Tariff Burden Outside Guidance, Near-Term Stock Pressure Likely: Analyst