Gap Announces Store Closures, Stock Price Plunges 28% to Multi-Decade Lows

Shares of Gap Inc. (NYSE:GPS) have hit multi-decade lows after the company announced it is closing more than a 100 stores, while reducing working hours for its stores in the United States and Canada.

Fundamental analysis: Shopping environment is getting worse

Gap has taken a serious hit in the past few weeks as the coronavirus outbreak has forced people to stay out of public places, including shopping malls and centers. As a result, GAP is also closing more than 100 stores in the areas where the outbreak is stronger.

Moreover, the company announced it will temporarily reduce store hours for all of its stores in the U.S. and Canada, with shops open from 11 a.m. to 8 p.m. Monday through Friday, and on weekends from 11 a.m. to 6 p.m.

As a result, Cowen lowered the target price for Gap stock from $18 to $14, which is still far away from the current market price of $8.07. A few days ago, Gap reported better-than-expected fourth-quarter earnings.

Technical analysis: Multi-decade lows

Gap stock price has lost more than 55% of its value in the last month or so, forcing the shares to trade at the lowest levels seen since 1996. The move lower has pushed the price action towards the supporting block between $8.20 and $9.50, with the stock now threatening to close below this support area.

Looking forward, GAP stock price can go and test the next support at $7.30 and $5.45 if the risk-off sentiment still prevails in the coming days and weeks. On the upside, the zone around $15 is an extremely important level for future price developments.

Summary

Shares of GAP are trading at the lowest levels since 1996 after the company announced it is shutting down more than 100 stores, and temporarily reducing working hours for its stores in the United States and Canada.