We recently published Jim Cramer Warned About Market Manipulation & Discussed These 22 Stocks. The Gap, Inc. (NYSE:GAP) is one of the stocks discussed by Jim Cramer.
Apparel firm The Gap, Inc. (NYSE:GAP)’s shares are down by 5% over the past year and by 16% year-to-date. Friday was a difficult day for the stock as it closed a whopping 15.4% lower. The dip came on the day The Gap, Inc. (NYSE:GAP) reported its fiscal first quarter earnings. The results saw the firm’s $3.50 billion in revenue miss analyst estimates of $3.52 billion while its $0.38 in earnings beat analyst estimates of $0.37. The Gap, Inc. (NYSE:GAP) also cut its sales growth outlook to 1% to 2% from an earlier 2% to 3%. On March 20th, JPMorgan increased the share price target to $35 from $33 and kept an Overweight rating on the stock. The bank commented that the shift came after The Gap, Inc. (NYSE:GAP) shared its long term plans. Cramer discussed the earnings:
“Now Richard Dickson’s doing a very good job. But it seems like it’s been inconsistent. This quarter, Gap, for instance, the actual flagship, was up 10%. But Old Navy was very disappointing. And that’s the biggest. And because Old Navy was disappointing, the company they just slashed the outlook in a way that people were kind of shocked. Old Navy projected down in the low single digits, it had been really, really strong.
“The issue was that they did not execute. Now we have some headline which says that they blamed it on the environment, the cost. No, it did not. . .specifically did not blame it on the environment, he blamed it on himself and on execution.
“So it was a jarring call, because Richard is really fabulous in fashion, I do have him tonight. And they caught some very big downgrades. Mathew Boss downgraded. A lot of people had really hoped that this was going to be the breakout quarter. He didn’t blame tariffs either. . .he just didn’t get it done. . .it was a brutally honest call. I recommend if someone did not have a good quarter, this is the way to do it. But the guide down was done by the CFO and it was disconcerting. Because if you take a longer term chart you’ll see the inconsistency in Gap has been very unnerving. Very unnerving.”
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