Schaeffer's Top Stock Picks for '25

Gap Stock Continues to Struggle After Bear Note

The majority of analysts were already bearish toward GPS

Deputy Editor
Jan 18, 2022 at 10:53 AM
facebook X logo linkedin


Gap Inc. (NYSE: GPS) was hit with a bear note by Morgan Stanley today, sending the shares 7.2% lower to trade at $16.95. The analyst in question downgraded Gap stock to "underweight" from "equal-weight," saying it forecasts all mall-based retailers' margins to revert back to a declining path seen before the pandemic started.

The majority of analysts were already pessimistic toward GPS, with eight of 10 in coverage rating the security a tepid "hold." There's room for additional price target cuts, though, as the 12-month consensus price target of $22.99 is a 33.8% premium to the stock's current level of trading. 

In the options pits, puts rule the roost. This is per Gap stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). That ratio sits higher than all but 1% of readings in its annual range, suggesting a much healthier-than-usual appetite for puts in the last 10 weeks. Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 1.02, which ranks in the 82nd annual percentile -- highlighting a massive appetite for puts among short-term speculators, as well. 

GPS premium can be had for a bargain right now. This is per the equity's Schaeffer's Volatility Index (SVI) of 45%, which ranks in the low 15th annual percentile. This means options traders are pricing in lower-than-usual volatility expectations.

A late-November bear gap sent Gap stock careening to its lowest trading level since September 2020,below $16. Most noteworthy trendlines are pressuring GPS at the moment, as the equity looks likely to continue to add to its 22.5% year-over-year losses.

 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?

 

 

(function(doc, script) { var js, fjs = doc.getElementsByTagName(script)[0], frag = doc.createDocumentFragment(), add = function(url, id) { if (doc.getElementById(id)) {return;} js = doc.createElement(script); js.src = url; id && (js.id = id); frag.appendChild( js ); }; // Google+ button //add('https://apis.google.com/js/platform.js', async="defer"); // Facebook SDK add('//connect.facebook.net/en_US/all.js#xfbml=1&appId=772755279557744', 'facebook-jssdk'); // Twitter SDK //add('//platform.twitter.com/widgets.js', charset='utf-8'); fjs.parentNode.insertBefore(frag, fjs); }(document, 'script'));