Diamonds and Dogs
Gap (GPS) is gapping higher. The specialty-retailer, Gap is up 15% following better than expected comps. The monthly sales remain dismal, but investors are expecting better future results thanks in part to a recovery at its Old Navy brand. Gap has faced stiff competition from fast-growing fashion retailers and a rapid shift in preference to online shopping. The company is also recovering from a campus fire that hit its distribution center in Fishkill, New York in August.
Honeywell (HON) not so sweet. The NJ based Industrial conglomerate dropped 8% to a 6 month low after cutting guidance for the current quarter and the fourth quarter. Honeywell expects to earn between $6.60 and $6.64 a share in 2016, down from a previous forecast of up to $6.70, due to lower business jet shipments, program delays in defense and choppiness in commercial aviation. The company said it expects organic sales to be down 1% to 2% for the year, compared to a previous forecast of a 1% decline. Yesterday, the analyst at Baird upgraded Honeywell to a buy with a $135 price target calling the company the best in class operator. He may want a do over on that call.
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