Gap Inc (GAP) Stock Forecast & Price Target

Gap is supported by a credible multi-brand turnaround led by stronger execution at Old Navy, where core categories like denim and active are improving and beauty is broadening traffic, while the Gap brand itself has delivered 11 consecutive quarters of comp growth, including +10% in both Q1 and Q2. The company’s recent 2025 performance, with 2% annual sales growth, 2.8% comparable sales growth, and FY25 gross margins of 40.8%, suggests healthier demand and better merchandising discipline across the portfolio. In addition, Banana Republic’s steadier comp trajectory, Athleta’s stabilization, and $2.9 billion of cash and equivalents at year-end 2025 provide financial flexibility to support continued brand investment and margin expansion.

Gap is a mixed portfolio with only the namesake banner showing strong momentum, while Old Navy is more than 55% of annual revenue and has slowed from +3% comps in FY24 and FY25 to -4% in 2Q26. Athleta is also deteriorating, with revenues likely below $1.1 billion this year, down more than 25% from its FY22 peak of nearly $1.5 billion, and heavier markdowns across both brands point to persistent demand and margin pressure. With consolidated sales only growing slightly, no clear SG&A leverage, and valuation still around 9x NTM EPS rather than a true trough, the stock looks vulnerable if Gap’s strength does not offset weakness elsewhere.