SAN FRANCISCO – Horacio Barbeito, the President and CEO of Old Navy, a division of GAP Inc. (NYSE:GPS), has sold shares of the company, according to a recent filing with the Securities and Exchange Commission. The transaction, which took place on June 24, involved the sale of 198.434 shares of common stock at an average price of $24.81, totaling approximately $4,923.
The sale was conducted under a pre-arranged Rule 10b5-1 trading plan, which allows company insiders to sell shares at predetermined times to avoid any accusations of insider trading. The plan had been adopted by Barbeito on December 8, 2023, and later modified on March 25, 2024. The shares sold ranged in price from $24.81 to $24.825.
Following this transaction, Barbeito no longer holds any shares of GAP Inc. common stock. This adjustment in his holdings is reflective of shares acquired through the company's Employee Stock Purchase Plan (ESPP), all of which were sold in this transaction.
Investors and the market often monitor insider transactions as they can provide insights into an executive's view of the company's future prospects. However, it's important to note that trading plans like the one used by Barbeito are typically set up well in advance and may not necessarily be indicative of an insider’s current view on the company.
GAP Inc. has not issued any official statement regarding this sale, and it remains a routine disclosure as required by SEC regulations. The transaction was signed off by De Anna Mekwunye, acting under power of attorney for Horacio Barbeito.
In other recent news, Gap Inc (NYSE:GPS). has made significant strides in its financial performance. The company's first quarter of 2024 saw positive comparable sales at its Banana Republic and Athleta brands, contributing to strong results for the quarter. This performance led to an increase in Gap's price target by TD (TSX:TD) Cowen to $28, maintaining a Hold rating on the stock.
The company's robust quarterly results prompted other financial entities such as BMO (TSX:BMO) Capital, Telsey Advisory Group, and BofA Securities to raise their price targets for Gap. Notably, BMO Capital raised its price target from $18 to $23 following significant revenue growth, particularly in its Banana Republic and Athleta brands.
However, CFRA maintained a Sell rating on Gap's stock, albeit raising the price target to $20 from the previous $15. CFRA's adjustment was based on Gap's first-quarter normalized EPS of $0.42, which exceeded consensus estimates and represented a significant increase from the previous year.
In the wake of these developments, Gap introduced a second-quarter 2024 guide and revised its full-year 2024 guidance upwards. The company now anticipates a mid-40% growth in earnings before interest and taxes (EBIT), a significant increase from the previously forecasted low-to-mid teens growth.
These recent developments reflect a cautiously optimistic outlook on the company's ability to reach its financial goals in the coming years, despite the challenging macroeconomic environment and the ongoing efforts to rejuvenate the brand portfolio.
InvestingPro Insights
The recent insider sale by Horacio Barbeito, the President and CEO of Old Navy, comes at a time when GAP Inc. (NYSE:GPS) exhibits a mix of financial stability and market performance that may interest investors. According to real-time data from InvestingPro, GAP's market capitalization stands at $9.24 billion, reflecting the scale of the company within the retail industry. The company's P/E ratio, a measure of its current share price relative to its per-share earnings, is 13.58, slightly under the adjusted P/E ratio for the last twelve months as of Q1 2023, which is 13.2.
Investors looking at dividend consistency will note that GAP has raised its dividend for 3 consecutive years, and even more impressively, has maintained dividend payments for 49 consecutive years, showcasing a long-term commitment to returning value to shareholders. The stock's dividend yield as of the previous year is 2.42%, which is an attractive figure for income-focused investors.
From a growth perspective, GAP's revenue for the last twelve months as of Q1 2023 was $15.0 billion, with a gross profit margin of 48.18%, indicating strong profitability at the core of its operations. Moreover, an InvestingPro Tip suggests that 11 analysts have revised their earnings upwards for the upcoming period, signaling potential optimism about the company's future performance.
For those interested in further analysis and tips, there are additional insights available on InvestingPro. Subscribers can access these metrics and more, including the company's strong return over the last month and predictions that GAP will be profitable this year. To enrich your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Discover the full range of InvestingPro Tips, which currently includes 9 more tips for GAP Inc., at https://www.investing.com/pro/GPS.
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