Gap (GPS 1.05%) saw its shares rise more than 6.5% in Tuesday morning trading after Citigroup analysts confirmed their price target on the clothing retailer at $24, representing a more than 55% upside over the current share price. Most analysts are far less bullish on the stock, with most rating it neutral, but Citi upgraded its rating from neutral to buy. Its price target is also slightly more than $5 above Gap's 52-week high of $19.86.

Citi's analysts are particularly favorable toward Gap's Athleta brand for women and girls, pegging its value at approximately $3.6 billion. In the research note accompanying the rating increase, Paul Lejuez said "with the favorable positioning of athletic/casual retailers in a post-COVID world, GPS' Athleta brand stands out as having value that may not be getting recognized by the market (as many others in their space have rerated higher)."

Sportswear shopping.

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The analyst also pointed out that although Gap didn't follow through on its plan to spin off Old Navy earlier in the year, the company's willingness to contemplate such a major change demonstrates executive readiness "to take on corporate actions to unlock shareholder value."

Lejuez's rating appears to rest partly on the possibility of Gap selling Athleta at some point in the near future. He said, "Athleta is one of the few athletic brands with a combination of scale, but plenty of room for growth (which could be attractive to several acquisitive companies)." Gap's leadership, by contrast, seems to intend at this point to keep Athleta, believing it can double its sales from the current $1 billion to $2 billion through international expansion, according to Ike Boruchow, a Wells Fargo analyst.

Gap will report its latest quarterly earnings this Thursday, Aug. 27.