The retailer beat fourth-quarter profit and revenue expectations
Retail giant Gap Inc (NYSE:GPS) yesterday announced better-than-expected fourth-quarter profits of 49 cents per share on $4.3 billion. The company attributed the results to lower markdowns and strong demand for its Old Navy products during the holiday season. At last check, GPS is up 4.4% at $20.17.
In response, six analysts raised their price target, including Barclays to $28 from $26. More tailwinds could stem from a round of upgrades, as 10 of 15 brokerage firms in coverage call GPS a “hold” or worse. The shares are also primed for a short squeeze, as 13.1% of their available float is sold short.
So far today, 11,000 calls and 7,971 calls have already crossed the tape, which is 11 times the intraday average volume. Most popular is the weekly 3/8 19-strike put, which expires at the close, followed by the April 22 call.
The security has been testing a floor at the $19 region since late February, but overhead pressure remains at the 60-day moving average. Shares are not too far off from their Dec. 11, two-year high of $22.07, and have added more than 101% over the past nine months.