Barclays says stay away from Gap shares. Here's why
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The Gap is offering deep discounts across stores such as Old Navy and Banana Republic, which may weigh on its shares, according to Barclays. The bank downgraded the retail name to equal weight from overweight. It lowered its price target to $20 from $26, suggesting 7% downside from Monday's close. "The timing of our downgrade is driven by sustained and increasing promotional activity across Old Navy and Banana Republic in [the second quarter of this year,]" analyst Adrienne Yih said Tuesday in a note to clients. "Old Navy promotions remain elevated, Banana Republic has inflected to Deeper, and Athleta remains a drag without a clear line of sight towards improvement." GAP YTD mountain Shares have fallen 16% year to date. Gap has fallen 16% year to date as it struggles to turn around its athleisure brand Athleta as well as Old Navy in an increasingly crowded apparel market. Both brands have seen sluggish sales in 2026, with Old Navy posting same-store sales growth of just 1% for the first quarter . And while Gap's flagship brand has experienced "continued strength and momentum," that likely won't be enough to lift shares, particularly as the retail space becomes "increasingly crowded and promotionally intense," Yih noted. The analyst also wrote that a "lack of newness" in denim trends could pose a headwind for Gap this fall. Barclays' call goes against consensus on Wall Street. Of the 21 analysts covering The Gap, 12 have a buy or strong buy on the stock, while 9 have a hold rating on it, LSEG data shows.