Wells Fargo upgraded Gap stock to "overweight"
Shares of Gap Inc (NYSE:GPS) are 5% higher before the opening bell, after Wells Fargo upgraded the retail stock to "overweight" from "equal weight" and hiked its price target by $5 to $16.
According to the analyst's note, GPS is a potential "turnaround story gaining traction," with "right-sized inventory, improved cost controls and new management se to inflect the narrative and drive material upside to Street."
Gap stock is on track to open above at its highest level since early March. The shares are up 10% and 17.5% in 2023 and year-over-year, respectively, with their 80-day moving average containing pullbacks in the last two months.
Coming into today, three brokerages rated Gap stock a "strong buy," compared to 11 other "hold" or worse ratings, which leaves the door open for more upgrades that could offer a boost. There's room for additional price-target hikes, too, considering the 12-month consensus target price of $11.19 is a 9.8% discount to Monday's close.
A shift in sentiment within the option pits could also occur. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GPS' 10-day put/call volume ratio of 1.27 ranks higher than 81% of annual readings. This shows that not only have puts outpaced calls recently, but the rate of put buying has picked up in the last few weeks.