Jefferies Says Gap Inc. Top Retail Stock, UBS Lowers RadioShack Price Target

Gap Inc. (NYSE:GPS): Jefferies believes Gap is positioned to be one of the best performing specialty retail stocks in 2012 due to improving merchandise at The Gap brand and easy topline and margin compares. The firm calls the stock it’s “sleeper pick” for 2012 and reiterates a Buy rating on shares with a $25 price target.

RadioShack Corp. (NYSE:RSH): UBS lowered RadioShack’s price target following the Q4 pre-announcement. Shares are Neutral rated.

Elster Group SE American Deposi (NYSE:ELT): Piper Jaffray views Elster (NYSE:ELT), Digi International (NASDAQ:DGII) and EnerNOC (NASDAQ:ENOC) as the most likely takeout candidates in the smart grid sector following the acquisition of Ruggedcom by Siemens (NYSE:SI). Piper expects sector consolidation to continue in 2012.

Rockwood Holdings Inc. (NYSE:ROC): Deutsche Bank raised its estimates and price target for Rockwood to reflect the company’s accretive debt refinancing and the recent M&A activity in the sector. Deutsche views Rockwood as one of the more attractive acquisition candidates in chemicals and reiterates a Buy rating on the stock.

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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