Checking in with Gap Stock Ahead of Earnings

Options traders are pricing in a hefty post-earnings swing

Deputy Editor
Mar 8, 2023 at 3:15 PM
facebook X logo linkedin


Clothing retailer Gap Inc (NYSE:GPS) will step into the earnings confessional after the close on Thursday, March 9. Wall Street expects the company to report fourth-quarter losses of 46 cents per share, alongside $4.36 billion in revenue. 

Gap stock was last seen 0.8% lower to trade at $12.01 ahead of the event. The shares have moved erratically after earnings over the past two years. In fact, of these eight next-day sessions, the stock moved higher four times, lower three times, and was unchanged once.

Following its last report, the retailer posted a 7.6% pop after beating analysts' earning expectations. Options traders are pricing in a 14.2% swing for the security this time around, which is more than double the 6.4% move Gap stock averaged following its last eight reports, regardless of direction. 

On the charts, GPS is pulling back near the $12 level. The equity's 140-day moving average is managing to provide support near the $11.70 area, too. Year-to-date, Gap stock maintains a nearly 6.5% lead.

GPS Chart March 82023

Ahead of the event, analysts are pessimistic. In fact, of the 14 in coverage, just two recommend a "strong buy." The shares sold short account for 18.1% of Gap stock's total available float, or nearly five days' worth of trading at its average pace of trading.

There's plenty of optimism in the options pits, where calls are handily outpacing puts. In fact, GPS sports a 50-day call/put volume ratio of 2.12 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 84th percentile of its annual range, which suggests a healthier-than-usual appetite for calls at the moment.

 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI