$21.19
+1.1%The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include denim, tees, fleece, and khakis; eyewear, jewelry, shoes, handbags, and fragrances; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, Websites, third-party arrangements, and catalogs. It has franchise agreements with unaffiliated franchisees to operate Old Navy, Gap, Athleta, and Banana Republic stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. As of December 31, 2021, the company had 2,835 company-operated stores and 564 franchise stores. It also provides its products through e-commerce sites. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.
Warren Buffett's Owner Earnings DCF analysis for intrinsic value calculation
Base year metrics used for projections
Forecast period and terminal assumptions
Calculation flow from present value to intrinsic value per share
Operating Cash Flow - Maintenance CapEx = Owner Earnings
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | $1.0B | $811.3M | $642.6M | $509.0M | $403.2M | $319.4M | $253.0M | $200.4M | $158.7M | $125.7M |
| Maintenance CapEx | -$74.5M | -$59.0M | -$46.7M | -$37.0M | -$29.3M | -$23.2M | -$18.4M | -$14.6M | -$11.5M | -$9.1M |
| Owner Earnings | $949.7M | $752.3M | $595.9M | $472.0M | $373.9M | $296.2M | $234.6M | $185.8M | $147.2M | $116.6M |
| Discount Factor | 0.926 | 0.857 | 0.794 | 0.735 | 0.681 | 0.630 | 0.583 | 0.540 | 0.500 | 0.463 |
| Present Value | $879.4M | $645.0M | $473.0M | $346.9M | $254.5M | $186.6M | $136.9M | $100.4M | $73.6M | $54.0M |
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.