Key TakeawaysGap is scheduled to release quarterly earnings Thursday following market close, with Wall Street projecting EPS between $0.48-$0.49 and revenue around $3.7 billion.Shares have declined significantly since late May following disappointing Old Navy and Athleta performance, yet surged 6% to $21.36 Tuesday.Call options are dominating put options (20,328 versus 13,242), with significant concentration at $23-$24 strike levels, indicating bullish sentiment.Goldman Sachs holds a Buy recommendation with a $25 price objective, while the average analyst target stands at $25.58.Wall Street remains evenly divided on the stock, with equal numbers of analysts maintaining bullish versus Hold ratings.The past several months have been challenging for Gap. Share prices tumbled following the company’s first-quarter earnings release in late May, during which executives highlighted decelerating momentum at Old Navy and continued struggles at Athleta. Management specifically pointed to women’s dress merchandise as an area where the company missed the mark.Since those May peaks, the stock has retreated by double-digit percentages. However, momentum appears to be building ahead of Thursday’s quarterly results. Shares climbed 6.02% to reach $21.36 during Tuesday’s session, positioning the stock around the middle of its 52-week trading band between $18.11 and $29.36.The Gap, Inc., GAPWall Street is anticipating earnings between $0.48 and $0.49 per share alongside revenue of approximately $3.7 billion when the company reports after Thursday’s closing bell.Expectations entering this quarter are notably more conservative compared to May. This creates either a potential upside surprise scenario or a downside risk, depending on the actual financial performance.Derivatives Market Shows Optimistic PositioningOptions activity reveals heightened investor interest. Trading volume reached 33,570 contracts by early Tuesday afternoon, significantly exceeding typical activity levels. Call option volume substantially outweighed put volume, registering 20,328 calls against 13,242 puts.The most concentrated activity centered on August 28 expiration calls at $23, $23.50, and $24 strike prices, each attracting approximately 1,500 contracts. On the protective side, $17 and $18 strike puts also experienced notable trading interest.Outstanding open interest reflects comparable sentiment. The largest individual position resides in the September 18 expiration $24 call with 7,448 outstanding contracts, trailed by the September 4 $21 put holding 6,437 contracts.The company’s three-month implied volatility registered at 49.57%, closely matching its 90-day realized volatility of 48.8%. This alignment suggests traders are anticipating movement without extreme volatility expectations.Based on options positioning, the market is identifying moves beyond $24 on the upside or below $18 on the downside as critical levels that could drive additional momentum following the earnings announcement.Wall Street’s PerspectiveGoldman Sachs confirmed its Buy stance on August 20, while reducing its price objective to $25. The collective analyst consensus target registers at $25.58 according to 18 analysts monitored by Investing.com.InvestingPro’s intrinsic value calculation places Gap at $24.62, suggesting approximately 15% appreciation potential from present levels.Nevertheless, analyst conviction remains divided. Among those surveyed by FactSet, precisely 50% maintain bullish positions, while the remaining half rate the stock at Hold or equivalent. This split opinion creates uncertainty heading into the earnings release.Supporting the bullish case, consumer discretionary spending has demonstrated greater resilience than anticipated despite elevated fuel costs. Gap’s fulfillment collaboration with DoorDash may provide a boost to back-to-school season sales.Working against the company, both Target and TJX have recently posted underwhelming apparel results, creating a less favorable competitive environment for Gap.Gap’s stock currently trades at $21.38, reflecting a 4.96% gain for the trading session.The post Gap (GPS) Stock Surges Ahead of Thursday Earnings: What Analysts Forecast appeared first on Blockonomi.