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

August 12, 2016 7:03 AM EDT
Get Alerts GME Hot Sheet
Price: $23.38 +2.86%

Rating Summary:
    12 Buy, 10 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 9
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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.

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Piper Jaffray, Michael Olson

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