Myer is tanking again

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Shares in Myer fell hard after the department store chain was dropped from the ASX200 index.

A short time ago, they were down 5% to $0.432.

Myer has been bleeding sales, its board is under attack by a major shareholder and its CEO, Richard Umbers, has stepped down.

Losing its position in the ASX200 means some investment funds with mandates to buy ASX200 stocks will be selling today.

Last month the department store issued a profit warning, its third since July 2017, and reported another drop in sales, worsening over the key Christmas period and New Year sales.

Also today, Morgan Stanley announced it was discontinuing coverage of Myer.

Morgan Stanley final share price target is $0.55.

“We see structural pressures from online competition and international entrants continuing, combined with limited financial flexibility given onerous lease liabilities,” wrote analyst Thomas Kierath in a note to clients.

“MYR’s operating margins are considerably lower than international peers which suggests an opportunity for expansion if execution improves.”