• Gap’s stock is down more than 20% in pre-release.
• Gap stock earnings reports came out after Tuesday’s close.
• GPS failed on EPS and income.

Gap (GPS) stock fell quite sharply outside of office hours on Monday as it posted earnings. The numbers were disappointing with earnings per share (EPS) of $ 0.27 versus an estimated $ 0.50. Revenue was also below estimates, amounting to $ 3.94 billion from an expected $ 4.44 billion. The shares were immediately dumped, falling more than 20%. Gap’s quote at the time of writing is $ 18.57, a loss of 21%.

GAP Inc chart, 5 minutes

Gap stock market news (GPS)

We mentioned the upper and lower numbers above, but in addition, Gap also lowered its forecast due to supply chain issues. Those words hit investors this year, and Gap drastically cut its adjusted EPS forecast for the year. It was at $ 2.10- $ 2.25 before, but now Gap guides it between $ 1.25 and $ 1.40. This is a huge drop as the COVID-19 plant closures in Vietnam hit Gap particularly hard. Gap obtains about 30% of its supplies from Vietnam. Downgrades and price target changes are coming quickly this morning with Goldman, Credit Suisse, Wells Fargo, Telsey, Deutsche and B. Riley all lowering their price targets for Gap, while JPMorgan lowered the stock .

Gap stock forecast (GPS)

Gap had struggled before and was trading in a bearish channel, but now it has exploded. It was already lower than the Annual Volume Weighted Average Price (VWAP), as well as the 100 and 200 day moving averages, so trying to buy this one was against the technical picture. We don’t see any drops in sight with $ 18 being a large area of ​​support moving up on the weekly chart. This shows the large volume area up to $ 16. If Gap becomes lower than that, then single digits will surely beckon, not to mention a test of pandemic lows at $ 5.26. There’s interim support at $ 12 along the way.

1 day GPS map