Gap Inc. shares are up 1.9% at the open after it was upgraded to overweight from sector weight at KeyBanc Capital Markets on optimism about the namesake brand's new product and a shift in promotion strategy. The price target is $36. Gap shares are trading at nearly $30 per share. KeyBanc analysts say Gap's new merchandise "more closely hews to Gap's American casual aesthetic" with analysts noting a more colorful selection that brings the company back to its "American roots" as well as improved fit and quality. In addition, KeyBanc analysts spotted items that were excluded from promotions on recent channel checks. The bank acknowledges near-term challenges, but says the company is taking steps to improve long-term viability. Gap shares are down 31.3% for the past year, but up 18.3% for the year so far. The S&P 500 is up 1.4% for the year to date.
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