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05/22/15 04:25:29 PM
WORD ON THE STREET

The Gap, Inc., Netflix, Inc., Best Buy Co., Inc.

The Gap, Inc.(GPS) : Gap Inc (NYSE: GPS) reported a decline in its earnings for the first quarter on Thursday. Here is how some of Wall Street's top retail analysts responded. Topeka: Q1 As Expected In a brief note, Dorothy Lakner said Gap's first quarter print came in as expected, with reaffirmed guidance a "testament" to the company's operational discipline. Lakner also noted that continued momentum at Old Navy is helping to offset Gap's product issues. The analyst also noted that the company's upcoming analyst day in June may prove to be a "positive catalyst" when management is expected to detail plans to "reinvigorate" Gap. Shares remain Buy rated with an unchanged $50 price target. Mizuho: Remain Sidelined Betty Chen commented in a note that the Gap and Banana Republic brands are expected to continue struggling as ongoing product adjustments and "lingering" inventory may not be fixed until Spring 2016. Chen also stated that she is seeing "mixed results" from the new delivery from Marisa Webb at Banana republic as the team adjusts for the lack of color and fashion newness that weighted on overall brand performance. On the other hand, Chen remains "encouraged" by Old Navy's continued momentum but the brand will see "increasingly difficult" comp and margin compares as the year progresses. With that said, the analyst concluded there is "little forward visibility" and shareholders should remain on the sideline. Shares remain Neutral rated with an unchanged $43 price target. Credit Suisse: Core-Gap Continues To Struggle Christian Buss commented in a note that "mounting evidence" shows the Gap brand is losing relevance with consumers. Buss argued that the rise of low-cost and deep value retailers with efficient supply chains and lower markdown risk on core apparel product is "eroding" the value proposition of Gap. The analyst continued that Gap's supply chain is still reliant on long lead-times and design teams are isolated from production - serving as an indication that a focus on product won't fix Gap's underlying issues. On the other hand, Old Navy posted a 3 percent comp in the quarter, marking the 13th consecutive quarter of positive comps. As such, Old Navy remains the "jewel" in the Gap Inc. crown given a better positioning relative to fashion-oriented concepts like Forever 21 and H&M. However, Old Navy's positive momentum will be overshadowed by continued woes from Gap. As such, the analyst is speculating that comps and earnings power will remain under pressure. Shares were reiterated with an Underperform rating with an unchanged $34 price target. View More Analyst Ratings for GPSView the Latest Analyst Ratings Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



Netflix, Inc.(NFLX) : With over 30 percent gains in the last three months, shares of Netflix, Inc. (NASDAQ: NFLX) are flying high and according to Rich Ross of Evercore ISI, the technical pictures suggests that they will continue to move higher from here. Ross was on CNBC recently to provide the technical outlook on Netflix's stock going forward. "I think that the stock goes much higher [from] here," Ross said. He feels that people who tried to short Netflix, but had to cover their shorts when the stock moved higher made a wise decision. "On the short side, your first loss is your best loss as they say and I think that's going to be the case here in Netflix as this stock moves higher." "When we look at that short-term chart, we see a text book pattern and form that tells us that the stock goes higher," Ross said. "You see that stair-step pattern which is comprised of sideways trading ranges punctuated by upside breakouts followed by another trading range and breakout and trading range and so on -- you get the picture." He continued, "That stairway gets us higher and when you zoom out, you look longer term the picture gets even better. You see this very well-defined sideways trading range that we had been in for just about 18 months. We broke to the upside in decisive fashion last quarter back in March." "We go higher from here, you see that little bullish flag that's formed on that weekly -- that's a continuation pattern to the upside. I have a measured target of $730 on this stock. I think, we get there. I like Netflix," Ross concluded. View More Analyst Ratings for NFLXView the Latest Analyst Ratings Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



Best Buy Co., Inc.(BBY) : Best Buy Co Inc (NYSE: BBY) reported better-than-expected first quarter earnings on Thursday. Shares opened strong and ended the day with gains of almost 4 percent. Peter Keith, Piper Jaffray, was on CNBC post-results to weigh in on the earnings. "We are very impressed," Keith said. "This was a solid quarter and what I would classify as a tough quarter for consumer electronics. We did see the industry backdrop slow down coming off of a decent holiday." "Best Buy likes to cite some industry data that was down 5.3 percent relative to Q4 that was down 3.2. But their sales came in better than expected with postivie same-store sales growth of 0.6 percent. So, it shows to us that they are clearly taking market share across a broad range of categories." Keith was asked where exactly or in which categories is Best Buy seeing growth. He replied, "I think first and foremost you're seeing share gains in the TV category and people are now upgrading to these larger screen 4k TVs; Best Buy has upgraded the assortment there and they provide best-in-class service to drive share." "You are also seeing some gains in the mobile phone category and appliances and PCs. I would say it's pretty uniformly across the story, you're seeing pretty consistent share gains at this point." On connected home being an opportunity to look forward to for Best Buy, Keith said, "Connected home has been talked about for a number of years. It does seem to be getting some traction even in the home improvement space." "I don't think that's going to be a calendar year 2015 or even a calendar year 2016 event, but certainly when you look at a couple of years that is a product category that could ramp nicely and Best Buy would be in a sweet spot in offering that selection to the customer," Keith concluded. View More Analyst Ratings for BBYView the Latest Analyst Ratings Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



 

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