{"id":417482,"date":"2010-03-11T13:00:52","date_gmt":"2010-03-11T18:00:52","guid":{"rendered":"http:\/\/www.businessinsider.com\/jp-morgan-sees-gap-inc-limited-brands-as-key-eps-drivers-in-2010-2010-3"},"modified":"2010-03-11T13:00:52","modified_gmt":"2010-03-11T18:00:52","slug":"jp-morgan-sees-gap-and-limited-earnings-driving-higher-in-2010-gps-ltd","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/417482","title":{"rendered":"JP Morgan Sees Gap And Limited Earnings Driving Higher In 2010 (GPS, LTD)"},"content":{"rendered":"<p>A new research report from JP Morgan indicates that Gap Inc. (GPS) and Limited Brands (LTD), parent company of Victoria&#8217;s Secret, are poised to see profits increase this year and drive EPS growth.<\/p>\n<p>For Gap Inc., a few key points include:<\/p>\n<ul>\n<li>The Old Navy brand could begin to rebound this year, seeing over $1 billion in revenue or $0.20 to $0.25 in EPS contribution over the next 5 years. JPM is maintaining their 2010 EPS estimate of $1.76, above management&rsquo;s guided range of $1.70 to $1.75. The estimate is driven by comps up 2%<\/li>\n<li>(Old Navy +2%, Gap flat and Banana Republic +5%) with EBIT margins up 50bps to 13.3% (vs. 10.1% 5-year average).<\/li>\n<li>Their Dec 2010 price target is being raised to $24 (from $23 previous) and is based on a 13.5x multiple on our FY10 EPS estimate, a discount to the group given the muted top-line expectations, relatively robust annualized operating margins (estimated at 13% for 2010 vs. its five year average of 10.1%), and lack of square footage growth.<\/li>\n<\/ul>\n<p>And as for Limited Brands:<\/p>\n<ul>\n<li>Shares are up nearly 30% since late January, currently trading at $23.36 a share.<\/li>\n<li>Growth will be driven by the Victoria&#8217;s Secret and Canadian businesses La Senza and Bath &amp; Body Works Canada.<\/li>\n<li>JPM&#8217;s 2010 EPS estimate is being raised to $1.60 (from $1.48 prior) and now represents the high end of management&rsquo;s guided range. They assume comps up 3% at VS, with segment margins up 190bps to 13.0% (vs. 13.9% 5-year average). <\/li>\n<\/ul>\n<p><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b992f547f8b9a12760c0300\/gps-comps-march-11th.jpg\" border=\"0\" alt=\"GPS Comps March 11th\" \/><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/jp-morgan-sees-gap-inc-limited-brands-as-key-eps-drivers-in-2010-2010-3#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/the-carol-bartz-20-day-challenge-2010-2\">Carol Bartz&#8217;s 20-Day, $10 Million Challenge<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/gamestop-stock-plummeting-on-revised-earnings-forecast-2010-1\">GameStop Stock Plummeting On Revised Earnings Forecast<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/radioshacks-stock-gains-on-takeover-speculation-cramer-agrees-oppenheimer-doesnt-2010-3\">Is RadioShack A Takeover Candidate: Cramer Says Yes, Oppenheimer Says No<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/EJ1QdaATfp0\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new research report from JP Morgan indicates that Gap Inc. (GPS) and Limited Brands (LTD), parent company of Victoria&#8217;s Secret, are poised to see profits increase this year and drive EPS growth. For Gap Inc., a few key points include: The Old Navy brand could begin to rebound this year, seeing over $1 billion [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-417482","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/417482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=417482"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/417482\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=417482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=417482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=417482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}