UPDATE: Jefferies Lowers PT on The Gap to $18

Jefferies is out with its report today on The Gap GPS, lowering its PT from $20 to $18. In a note to clients, Jefferies writes, "GPS reported 1Q EPS of 40c, slightly above JEF/Cons 38c/39c. However, the key issue here is the 2H outlook, which is significantly worse than expected due to a sharp rise in sourcing costs. With weak sales trends, ongoing mgmt/strategy changes and inconsistent consumer behavior, we do not expect GPS to overcome the sourcing headwinds in 2H easily. Remain cautious and reiterate Hold rating. Lowering PT to $18." Jefferies maintains Hold on GPS. At the time of posting, shares of GPS were trading pre-market at $19.55, down 16.06% from Thursday's close.