Piper Jaffray Maintains OW Rating, $25 PT On GPS

Piper Jaffray is maintaining its OW rating and $25 PT on shares of Gap Inc. GPS. “We are maintaining our OW rating on GPS shares following the company's FQ4 and year-end earnings report. FY11 EPS of $1.88 exceeded Gap's revised guidance of $1.85-$1.86 and prior guide of $1.77-$1.82 as well as PJC's and consensus est of $1.86,” Piper Jaffray writes. “GPS grew FY11 EPS by +19% on a +1% comp and controlled expenses. While management cited cost pressures would negatively affect FY12 margins, we believe the domestic business is stabilizing as they continue store rationalizations (125 closures) and increase the higher margin DTC. We maintain our $25 PT based on a revised 13x FY12E EPS of $1.93.” Gap Inc. closed Thursday at $22.49.