Citigroup Raises Gap Estimates

Citigroup analyst Kimberly Greenberger is raising her fourth quarter 2007 estimate on Gap Inc. (GPS) to $0.36 from $.30 after it appeared the clothing giant, under the stewardship of former Shoppers Drug Mart CEO Glenn Murphy, improved its sales over the crucial pre-holiday period. She rates the shares a "buy."

Ms. Greenberger also raised her 2008 estimates to $1.45 from $1.25 based on an outlook for improvements in gross margins and a continued improvement in sales. Her new 2009 estimate is $1.65, up from $1.40.

The new estimates assume sales performance at stores open for more than a year of 1% compared with -2% previously.

In a note to clients she wrote:

Near-term catalysts include our belief that Gap is beginning to deliver sales improvement on better product while strong inventory control and cost cuts are driving margin recovery.

Comments

[ragman]

Go Gap, Go!!!