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Tickers in this Article: GPS
On Thursday, November 15, 2012, Gap (NYSE:GPS) will release its third quarter earnings. In the past month, expectations have risen for the upcoming results. The consensus analyst estimate has risen from 54 cents per share to the current projection of earnings of 63 cents per share.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 12 Things You Need To Know About Financial Statements

What to Expect: Analysts are expecting Gap to report earnings of 63 cents per share, up 65.8% from a year ago, when the company reported earnings of 38 cents per share.

Over the past three months, this has increased from 51 cents. Analysts are expecting earnings of $2.25 per share for the fiscal year.

Gap is expected to beat last year's reported revenue of $3.58 billion and come in at $3.82 billion for the quarter. For the fiscal year, expected revenue is $15.53 billion.

Company Performance: GPS' P/E ratio is 18.9. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Can Investors Trust the P/E Ratio?

The stock price has fallen 2.9% since August 14, 2012, from $34.61 to $33.62. The biggest recent change for Gap's stock price came on September 28, 2012, when it rose $42.62 per share to $78.

The Competition: The Gap is an international specialty retailer that sells casual apparel, accessories and personal care products for men, women, and children. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.

The company's closest competitor in the retail (apparel) industry is Urban Outfitters (URBN). Analysts are less optimistic about Gap than about Urban Outfitters. Fifteen out of 27 analysts rate the latter a buy compared to 10 of 23 for the former.

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