Shares of Gap Inc GAP rallied in early trading on Friday, after the company reported upbeat fourth-quarter results on Thursday.

The results came in amid an exciting earnings season. Here are some key analyst takeaways.

JPMorgan On Gap

Analyst Matthew Boss maintained an Overweight rating, while raising the price target from $29 to $30.

Gap reported its fourth-quarter earnings at 54 cents per share, ahead of Street expectations of 37 cents per share, "driven by a beat across line items," Boss said in a note. The company's same-store sales growth of 3% was higher than the consensus of 1.1%, while gross margins remained flat at 38.9%, he added.

Management guided to fiscal 2025 net sales growth of 1%-2%, in line with the Street's 1.6% expectations, translating to EBIT margins of 7.9% and earnings of around $2.40 per share, which is 10% above consensus of $2.17 per share, the analyst stated. Gap is at an inflection point to support low-to-mid single-digit sales growth and "annual operating margin expansion targeting historical levels of profitability (i.e. 8-10%)," he wrote.

Check out other analyst stock ratings.

BMO Capital Markets On Gap

Analyst Simeon Siegel reiterated a Market Perform rating and price target of $25.

Gap reported its quarterly sales at around $4.149 billion, beating expectations of about $4.070 billion, Siegel said. Comp growth of 3% was "driven by strong performance in key categories, including active/denim," he added.

The company's earnings were strong, and management indicated "continued market share gains," the analyst stated. Gap delivered robust free cash flow generation, ending the quarter with around $2.6 billion in cash, which the company "has yet to identify how it may be deployed," he further wrote.

Telsey Advisory Group On Gap

Analyst Dana Telsey reaffirmed a Market Perform rating and price target of $26.

Gap's fourth-quarter beat was driven by "stronger results across the board, with topline, gross margin expansion, and expense leverage all coming in better than expectations," Telsey said. Management's guidance reflects 8%-10% operating income growth between $1.20 billion and $1.22 billion, higher than the consensus of 7%, she added.

Gap continues to grow sales and take market share in a challenging industry, the analyst stated. "Gap and Old Navy are the furthest along in terms of their brand transformations, which is reflected in the increased cultural relevancy and revenue growth," she further wrote.

GAP Price Action: Shares of Gap had risen by 13.3% to $22.07 at the time of publication on Friday.

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