UPDATE: Deutsche Bank Raises PT on The Gap to $19 (GPS)

Deutsche Bank is out with its report on The Gap GPS, raising its price target from $17.50 to $19. In a note to clients, Deutsche Bank writes, "In our view, the key takeaway for Gap Inc. continues to be an over-reliance on buybacks to drive EPS. In 4Q, buybacks accounted for 79% of EPS growth, which while down from 112% in 3Q, still speaks to the bigger story of unlikely multiple expansion. The issue remains one of prevalent customer traffic losses (Figure 1) and, in our view, product which may not warrant price increases. Higher inventories pose a risk if the consumer retrenches, but expense controls and FCF are positives. Maintain Sell, but bumping PT to $19 or 10x our new FY11 EPS." At the time of posting, shares of GPS were trading at $23.03, up 2.40% from Thursday's close.