GameStop (GME) PT Bumped to $57 at Piper Jaffray
Piper Jaffray analyst Michael Olson reiterated an Overweight rating while bumping estimates and his price target on GameStop (NYSE: GME) to $57.00 (from $56.00) amid a strong July quarter. The sees tailwinds of the video game cycle and new segments continuing.
Olson commented, "GameStop reported strong Q2 results with EPS of $0.31 ($0.07 above Street). Comp guidance for Q3 is below consensus, but the 2015 EPS outlook was increased by $0.03 and the FY comp range guide is slightly higher. The company did not raise EPS guidance by the full amount of the Q2 beat, leaving some conservatism in the outlook. Also, EPS guidance does not include share repurchases, while Street estimates do. Upside in Q2 was primarily driven by new hardware sales and upside in "other" segment revenue. GME also indicated that it repurchased 1.4M shares in Q2 for $60.7M and will repurchase a minimum of $200M in '15."
He added, "The video game industry is now into the "renewed growth phase" and we expect trends in the sector will continue to improve in 2H'15 and into '16. Maintain OW; PT to $57 (from $56) on unchanged 13x our new CY16E EPS."
The firm bumped FY 2015 EPS from $3.80 to $3.83 and FY 2016 EPS from $4.30 to $4.38.
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Shares of GameStop closed at $46.20 yesterday.