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Is this Large Market Cap Stock target price reasonable for The Gap, Inc. (NYSE:GPS)?

The company in question is, The Gap, Inc. (NYSE:GPS) currently with a stock price of 25.33 (-1.65% today). The market cap for The Gap, Inc. is 10205.34, and is in the sector Services, and Apparel Stores industry. The target price for The Gap, Inc. is 20.6. Currently The Gap, Inc. is trading with a P/E of 13.01, and a forward P/E of 12.59. Average volume for The Gap, Inc. is 7740.11 and so far today it is 4028729.

Performance in the last year for The Gap, Inc. has been -26.25%. For EPS growth, The Gap, Inc. has seen a growth of -22.30%, and is looking to grow in the next year to 10.00%. More long term stats show that EPS growth has been 3.50% over the last five years and could be 7.97% for the next five years. The Gap, Inc. has seen sales growth quarter over quarter at -6.00%, with EPS growth quarter over quarter at -43.50%. The 20-day simple moving average is 24.17%, with the 200-day simple moving average coming to 5.33%.

Since the IPO date for The Gap, Inc. on the 7/23/1987, The Gap, Inc. has seen performance year to date to be 7.26%. With The Gap, Inc. trading at 25.33, the dividend yield is 3.57%, and the EPS is 1.98.

So could The Gap, Inc., be undervalued? Well as said before P/E is 13.01. The PEG is 1.63, P/S is 0.66 and the P/B is at 4.06. The P/cash is 7.77, with P/free cash flow at 21.95.

The Gap, Inc. ability to deal with debt shows that the current ratio is 1.5, and the quick ratio is 0.8. This is with long term debt/equity at 0.52, and total debt/equity at 0.69.

In terms of margins, The Gap, Inc. has a gross margin of 35.60%, an operating margin of 8.70% and a profit margin of 5.20%.Payout ratio for The Gap, Inc. is 46.10%. Return on assets come to 10.70% with return on investment coming to 22.80%.

Insider ownership for The Gap, Inc., is at 5.30% and institutional ownership comes to 59.40%. Outstanding shares are at 396.17. While shares float is 216.78. The float short is currently 15.44%, and short ratio is 4.32.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Stephen Butters

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