| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 95 | 6.5x | 17.8x | Top tier | |
Growth | 35 | 1.1% | 7.1% | Bottom tier | |
Quality | 76 | 13.1% | 4.5% | Top tier | |
Safety | 72 | 1.5x | 2.6x | Top tier | |
Capital Return | 51 | 3.16% | 2.12% | Around median | |
Momentum | 30 | -3.0% | 2.9% | Bottom tier | |
Sentiment | 50 | 8 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
The Gap, Inc. operates a portfolio of apparel brands including Old Navy, Gap, Banana Republic, and Athleta, generating revenue from the sale of apparel and related categories through a store network that is being selectively updated and expanded. The core business remains centered on categories such as denim, activewear, sweaters, and knitwear, while the company is investing in additional growth sources including fragrance, beauty, and accessories; it launched Old Navy Beauty Co. nationwide with more than 30 external brands alongside private-label products, relaunched Gap's fragrance collection in July 2026, and plans to introduce Gap bags during Fashion Week in September 2026.
In Q2 fiscal 2026, net sales declined 2% year over year to $3.7 billion, and comparable sales fell 1%. According to EDGAR data, gross profit was $1.9 billion, net income was $501 million, and reported earnings per share were $1.38; on an adjusted basis, earnings per share were $0.52, exceeding the $0.48 estimate but below $0.57 a year earlier. Reported gross margin was 52.8%, while adjusted gross margin increased 20 basis points to 41.4%, and adjusted operating margin declined 70 basis points to 7.1% despite reported operating margin reaching 18.5%.
The brand mix was clearly uneven in Q2 fiscal 2026: Gap net sales increased 9% and comparable sales rose 10%, while Banana Republic net sales increased 1% and comparable sales rose 3%. Meanwhile, Old Navy net and comparable sales declined 4%, and Athleta net and comparable sales fell 12%. This reflects the portfolio's reliance on sustained strength at Gap and Banana Republic to offset weakness at Old Navy and the early stage of Athleta's turnaround.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $25.75, versus a wide range of $20 to $42 and a neutral consensus, while the average is approximately 12% below the 52-week high of $29.36. No published price-to-earnings ratio is available, so the valuation assessment is based on expected adjusted earnings per share of $2.35–$2.45 for fiscal 2026 and the wide 52-week range of $18.11 to $29.36. The large gap among analyst targets reflects the market's balancing of margin improvement and share repurchases on one hand against the lowered sales outlook and weakness at Old Navy and Athleta on the other.
Figures in the text are as of 2026-08-30; the live price is shown at the top of the page.
Net sales declined 2% to $3.7 billion, and reported revenue of $3.65 billion fell short of the analyst estimate of $3.69 billion. In contrast, adjusted earnings per share were $0.52, exceeding the $0.48 estimate despite declining from $0.57 a year earlier. Adjusted gross margin increased 20 basis points to 41.4%, demonstrating pricing and inventory management strength despite weak sales.
Old Navy's net and comparable sales declined 4% in Q2 fiscal 2026, with weakness in the women's summer assortment accounting for approximately three points of comparable sales pressure. Management said dresses, shorts, and swimwear were affected by assortment and pricing decisions, while summer marketing failed to generate the expected customer traffic. The improvement plan includes denim, Old Navy Sport, approximately 40 in-store shop spaces, Old Navy Beauty Co., the Fanatics partnership, and campaigns featuring Cardi B and MrBeast. Michael Francis will become the brand's President and Chief Executive Officer on November 2, 2026, succeeding Haio Barbeito, who will work with him in an advisory capacity to ensure a smooth transition.
Gap achieved 10% comparable sales growth and 9% net sales growth in Q2 fiscal 2026, marking its eleventh consecutive quarter of positive growth. Performance was led by denim, fleece, kids, and baby, while the Hailey Jean sold out quickly and helped increase traffic and support the broader business. The company expects high-single-digit to low-double-digit comparable sales growth for the brand in fiscal 2026, with approximately 35 store updates increasing the share of North American stores featuring the newest format to nearly one-quarter by year-end.
The company raised its adjusted gross margin outlook to slightly above the prior year and increased its adjusted operating margin outlook to 7.4%–7.6% compared with 7.3%. The estimate assumes the 10% tariff rate remains in effect through the end of August 2026, providing approximately $15 million of additional relief, primarily in Q4. If the same rate remains in effect through the end of Q3, the company estimates an additional benefit of $35 million, but part of the relief is funding higher fuel costs and Old Navy valuation adjustments.
The company ended Q2 fiscal 2026 with $2.5 billion in cash and equivalents and short-term investments. Since the beginning of the year, operating cash flow totaled $550 million and free cash flow reached $261 million, while the company expects capital expenditures of approximately $650 million for stores, updates, technology, and the supply chain. It also paid $62 million in dividends during the quarter and repurchased more than $600 million, or 26 million shares, with approximately $400 million remaining under the current authorization.
The primary operating risk comes from Old Navy after its comparable sales declined 4% and from Athleta after its 12% decline in Q2 fiscal 2026. Adjusted operating margin also declined 70 basis points to 7.1%, and the company expects approximately 50 basis points of pressure from rent, occupancy, and depreciation during the year. Tariffs, fuel costs, and geopolitical disruptions add risk to inventory and margins, with disruptions already reflected in a 4% increase in inventory units due to in-transit merchandise.
