Slow Sales Drive 3Q Miss for GameStop (GME); Baird Cuts Price Target to $46
Baird maintained an Outperform rating on GameStop (NYSE: GME), and cut the price target to $46.00 (from $54.00), following the company's 3Q earnings report. GME reported revenues and EPS of $2.01B and $0.54, respectively, below consensus expectations of $2.15B and $0.59. The miss was driven by soft next-gen hardware and new software sales.
Analyst Colin Sebastian commented, "Q3 results were a mixed bag, as we previewed last week, with results largely in line with our below-consensus estimates. Q3 sales were impacted by weaker console hardware and software, delays in new tech store openings, and FX headwinds. Importantly, management indicated November trends are improving, consistent with our field checks, as Holiday sales could mark a turning point either positively (rebound in physical) or negatively (accelerating shift to digital)."
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Shares of GameStop closed at $39.26 yesterday.