Source: Jefferies

For now, Gap’s stock is being valued for its Gap business alone, and that makes the stock a “mispriced asset,” Konik wrote in a note to clients.

Meantime, Athleta is gaining a larger share of the athletic apparel market, Konik said, applauding Gap’s push in this separate division. Peers in the athletic space include Lululemon, Nike and Adidas. And some of Old Navy’s biggest off-price competitors consist of TJX, Ross and Burlington.

Gap CEO Art Peck said last week the company expects net sales at Old Navy to exceed $10 billion, and sales at Athleta to top $1 billion during the next “few years.”

These gains will come as a result of U.S. store expansion efforts and growth in e-commerce and mobile, Gap said. The company will be shuttering 200 Gap and Banana Republic locations, while simultaneously opening nearly 300 Old Navy, Athleta and what Gap calls “value expression” shops.

Konik added that Old Navy’s fleet of stores is especially appealing since they’re typically detached from malls. In Athleta, Konik expects the brand to continue to be a “share gainer in an attractive athletic apparel category.”

As of Monday’s close, Gap shares have rallied more than 15 percent higher over the past year.