Jim Cramer’s Top 10 Must-Watch Stocks Today

7. The Gap Inc.(NYSE:GAP)

Number of Hedge Fund Investors: 39

Jim Cramer is impressed with the new direction at The Gap Inc.(NYSE:GAP) under its CEO, Richard Dixon. He finds it especially satisfying when companies outperform expectations and surprise their critics.

“I’m hearing about the new Gap under its CEO, and I think he’s doing a good job. Few things in this business are more satisfying than outperforming expectations and surprising short sellers.”

The Gap Inc. (NYSE:GPS) offers a promising investment opportunity due to its strong recent performance, effective leadership, and brand rejuvenation efforts. In Q2 2024, The Gap Inc. (NYSE:GPS) saw a 5% increase in net sales and a 3% rise in comparable store sales, with Old Navy achieving its fourth straight quarter of growth. This performance demonstrates The Gap Inc. (NYSE:GPS) ‘s ability to engage consumers successfully, even in a tough market.

The Gap Inc. (NYSE:GPS) also improved its gross margin by 500 basis points, showing better cost management and operational efficiency. The appointment of Richard Dickson as CEO is another positive development. Known for revitalizing the Barbie brand at Mattel Inc. (NASDAQ:MAT), Dickson is expected to bring similar success to The Gap Inc. (NYSE:GPS), focusing on brand renewal and operational improvements. Analysts also see a favorable risk/reward balance for The Gap Inc. (NYSE:GPS).