Gap's Stock Could See "a Breakout" 2015: Analyst

Gap Inc. shares rose 1.2% in a lower market on Tuesday after FBR analyst Susan Anderson raised the stock to outperform from market perform. While the retailer's namesake brand may continue to weigh on the business, the analyst said that risk is outweighed by "substantial 2015 tailwinds." "2015 could be a breakout year for the stock" as Gap shares had declined about 5% the past year, lagging the S&P 500's 14% gain, she said. Among the stock's tailwinds, she said the retailer's aggregate promotional level, helped by inventory control, declined in January and February, and that should boost its gross margin. Margin also should be helped by other factors including lower cotton prices. On the Gap brand, she said new leadership could help improve performance. The company's discount Old Navy unit, which saw an 11% jump in fourth-quarter comparable sales, should see "continued momentum," helped by factors including the so-called "athleisure" trend and lower gas prices, she said.