NEW YORK (AP) -- Gap Inc.'s namesake chain and its Old Navy stores are offering more products that are resonating with consumers, an analyst said Monday, and reiterated her "Buy" rating on the stock.
Gap and many other retailers will report April sales results Thursday. Ahead of that, Janney Capital Markets analyst Adrienne Tennant said she expects a "modest positive" result for Gap.
She said many retailers, including Gap and Old Navy, are still marking down items, but the two stores are marking down less than previously and their inventory levels are better than they were last year.
Trendy bright bright colors and other fashion styles are catching on with consumers, in all three of Gap's brands, including Banana Republic, she added.
"We continue to note positive customer reception to Gap's spring flows, which are much improved and include bright colors and trend-right fashion," she wrote. "At Old Navy, product improvement is also evident at compelling price points with a depth of colors and floral patterns, while Banana Republic has also driven increased traffic with the Mad Men Collection this spring."
She kept her "Buy" rating on the stock and raised her 2012 estimate on the stock to $1.90 from $1.85. Analysts polled by Factset, on average, expect $1.80 per share.
Shares fell 4 cents to $28.49 during midday trading. The stock is up 54 percent since the beginning of the year and is trading near its highest point in the past decade.