Gap stock plunges after Morgan Stanley downgrade

Gap Inc (GPS.US) shares tumbled more than 7% during today's session after Morgan Stanley downgraded the apparel retailer’s stock to “underweight” from “equal-weight” with a target of $14.00 saying it forecasts all mall-based retailers' margins to revert back to a declining path seen before the pandemic started. Morgan Stanley also found out that GAP estimates have not properly factored in how higher promotions, increased shipping expenses through higher e-commerce penetration and ongoing air freight headwinds may offset GPS' rent, occupancy, & depreciation leverage from store closures. 

Gap Inc (GPS.US) stock launched today's session with a bearish price gap and is heading towards major support at $16.00 which is marked with lower limit of the 1:1 structure, previous price reactions and earlier broken lower limit of the descending channel. Should break lower occur, downward move may accelerate towards the support zone around $14.00. Source: xStation5