) to equal-weight.
Analyst Dennis Van Zelfden downgraded from overweight. He notes August same-store sales were below his +6% estimate, disappointing since it compared to -2% last year. Also he notes the company faces increasingly tough comparisons beginning in October, although he acknowledges the two-year combined comparison remain relatively easy.
Assuming a multiple of 18 on next year's earnings per share is reasonable, Gap would have to earn about $1.15 per share to justify Thursday morning's price. He notes although that earnings per share target is reachable, the stock would still be fairly valued, in his opinion.