Why is Gap so Cheap?

This business could be back in style soon.

Andrew Willis 18 April, 2022 | 4:48AM
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Andrew Willis: When malls closed in March 2020, retailers like Gap (GPS) took a hit. But after dropping from 18 US dollars to around 5, the company’s stock started to make a comeback like the potential turnaround story for its namesake business, Gap.

But then the market saw Banana Republic closures, and a rocky recovery from COVID-19 supply chain disruptions… perhaps missing solid balance sheets and no risk of financial distress that equity analyst David Swartz can see.

And the company’s other brands, like Old Navy and Athleta, now align with big trends in e-commerce and athleisure, and provide value at a discount to customers. Much like the great value potential this stock offers customers – at least before the business is back in fashion.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Gap Inc21.60 USD-0.74Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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