NEW YORK (TheStreet) --Shares of Gap Inc. are up by 1.47% to $42.72 in pre-market trading on Monday, following a ratings upgrade to "buy" from "hold" at Jefferies. The firm said it raised its rating on the apparel and accessories retailer as it believes Gap will benefit from a decrease in cotton prices and from the continuing growth of its Old Navy business. Jefferies also cited continued share buybacks, the relevance of the company's Gap brand, and the correction of "product missteps" as reasons for the upgrade. Exclusive Report: Jim Cramer's Best Stocks For 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Jefferies has a $50 price target on Gap stock. Separately, TheStreet Ratings team rates GAP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate GAP INC (GPS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results." Highlights from the analysis by TheStreet Ratings Team goes as follows: The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. GAP INC has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GAP INC increased its bottom line by earning $2.75 versus $2.32 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $2.75). The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. 43.73% is the gross profit margin for GAP INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.83% is above that of the industry average. You can view the full analysis from the report here: GPS Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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