By Sam Boughedda
Gap Inc (NYSE:GPS) was raised to Equal Weight from Underweight with an unchanged price target of $12 per share by Morgan Stanley analysts on Wednesday.
In a note focused on retail stocks, the analysts told investors the firm is upgrading the specialty retail & department store sub-sectors to In-Line.
"On GPS, we see more upside than downside at current levels, & move to Equal-weight with an unchanged $12 price target from Underweight prior," wrote the analysts.
The analysts said that "everything that could go wrong for Gap did go wrong" in 2022, pointing to bloated inventory, assortment mis-execution, management departures, consistent guidance cuts, and more.
"Looking ahead, we expect the rate of change inflects positively from here, & the stock may further enjoy a halo period once a new CEO is announced. Even better, GPS is one of few stocks that may have already bottomed," concluded the analysts.
Gap shares have jumped over 2% in Wednesday's session, adding to its recent gains, which have seen it rally 16% in 2023.