Gap Inc (NYSE:GPS) shares rose almost 7% after the clothing retailer was upgraded to ‘overweight’ from ‘neutral’ by JPMorgan.
The investment bank also increased its price target to $30 from $28.
In early afternoon trading, Gap shares were changing hands for $25.82, up $1.57.
JP Morgan's upgrade followed a meeting with Gap’s CEO Richard Dickson and CFO Katrina O'Connell.
In a research note, the bank praised Gap CEO Richard Dickson’s “reinvigoration” of the store portfolio, which includes Gap, Banana Republic, Old Navy and Athleta.
Since Dickson joined the company about a year and a half ago, Gap has achieved revenue growth for the last four quarters and gained market share.
JPMorgan raised its 2025 earnings per share estimate for Gap to $2.40, above the Street consensus of $2.14.
It projects same-store sales growth of at least 6% in fiscal 2025 and 2026.