Gap Inc. (NYSE:GPS) Receives 'Buy' Rating from UBS After Strong Q2 Performance

• Investment firm UBS reiterated its "Buy" rating for Gap Inc. (NYSE:GPS), raising its price target to $42.00.
• Gap reported strong second-quarter results, with adjusted earnings per share (EPS) of $0.52 surpassing analyst estimates and raising its annual profit forecast.
• Despite mixed brand performance, Gap demonstrated positive overall financial health, including a net income of $501.00 million and year-to-date free cash flow of $261.00 million.

Gap Inc. (NYSE:GPS) is a global apparel retailer that operates several well-known brands, including Old Navy, Banana Republic, and Athleta. The company sells clothing, accessories, and personal care products for men, women, and children. It faces intense competition in the fast-fashion and apparel industry from various online and brick-and-mortar stores.

On August 28, 2026, investment firm UBS reiterates its "Buy" rating for Gap, with the stock priced at $24.55. This positive view follows the company's second-quarter report. Gap announces adjusted earnings per share (EPS) of $0.52. EPS is a key measure of a company's profitability, and this figure surpasses analyst estimates.

In addition to the rating, UBS raises its price target for Gap to $42.00. A price target is an analyst's projection of a stock's future price. This confidence is shared by the company, which, as highlighted by Reuters, raises its annual profit forecast. The new guidance is for adjusted earnings between $2.35 and $2.45 per share.

The company's positive outlook is largely driven by its main brand. Comparable sales for the Gap brand show a 10% increase compared to the previous year. However, performance across its other brands is mixed. Old Navy's net revenue sees a 4% decline to $2.10 billion, while sales at Athleta drop by 12%.

Despite mixed brand performance, overall financial health shows positive signs. The company reports a net income of $501.00 million and a year-to-date free cash flow of $261.00 million. Free cash flow is the cash a company has left after paying for its operations and investments, which indicates financial flexibility.