Gap shares dip as Citigroup downgrades stock to 'neutral' on tariff worries

GAP

20/08/2025 12:41

** Shares of Old Navy-parent Gap GAP.N fall nearly 2.2% to $20.26 in premarket trading

** Citigroup downgrades stock to "neutral" from "buy"

** Cites that specialty apparel retailers like Gap may struggle to offset tariff costs through price hikes, as they typically lack pricing power and have fewer partners to share the financial burden

** Trims PT to $22 from $30, which represents 6.2% upside to the stock's last close on Tuesday

** Brokerage also says gross margin risks are rising in 2H, with lingering effects expected in 1H26.

** "We believe this makes for a tough setup over the next several months, especially against the very strong holiday in 2024," adds Citigroup

** Average rating from 19 analysts is "buy"; median PT is $26 - data compiled by LSEG

** As of last close, GAP stock is down nearly 12.4% YTD

 (Reporting by Akriti Shah in Bengaluru)

 ((akriti.shah@thomsonreuters.com))