The Gap, Inc. (NYSE:GAP) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to US$24.22 in the week after its latest third-quarter results. Revenues were US$3.8b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.72, an impressive 24% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following last week's earnings report, Gap's 17 analysts are forecasting 2026 revenues to be US$15.2b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 4.2% to US$2.09 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$15.2b and earnings per share (EPS) of US$2.02 in 2026. So the consensus seems to have become somewhat more optimistic on Gap's earnings potential following these results.

The consensus price target was unchanged at US$28.59, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Gap, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$16.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2026. Historically, Gap's top line has shrunk approximately 0.3% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.7% per year. So it's pretty clear that, although revenues are improving, Gap is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Gap's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gap's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Gap analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Gap is showing 1 warning sign in our investment analysis , you should know about...

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