GameStop (GME): Hardware Cycle and VR Should Overshadow Shift to Digital - Piper Jaffray

Piper Jaffray analyst, Michael Olson, reiterated his Overweight rating on shares of GameStop (NYSE: GME) and reiterated his price target of $41.

There are three key components to the GME story today:

1) secular headwinds of ongoing shift towards digital gaming

2) positive near-term impact of the mid-cycle hardware refresh & VR

3) the diversification of the business towards non-GameStop store initiatives (AT&T wireless stores, etc.).

The analyst believes the most impactful of these trends in the next year will likely be the 2H'16 & '17 updated slate of hardware (incl. VR). Historically, new hardware has drawn gamers into retail. While GameStop faces headwinds from digital full game downloads, there are some near-term catalysts for GME shares with the mid-cycle console refresh and VR.

For an analyst ratings summary and ratings history on GameStop click here. For more ratings news on GameStop click here.

Shares of GameStop closed at $31.11 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• UBS Downgrades Hino Motors Ltd. (7205:JP) (HINOY) to Neutral
• Prudential Financial (PRU) PT Raised to $116 at Evercore ISI