Industry Weakness Leads to EPS Miss for GameStop (GME); Wedbush Cuts Price Target to $45
Wedbush maintained an Outperform rating on GameStop (NYSE: GME), and cut the price target to $45.00 (from $55.00), following the company's 3Q earnings report. Halo 5 and Ubisoft’s Assassin’s Creed Syndicate underperformed expectations, and industry hardware sales did not accelerate after price cuts. Non-GAAP EPS was $0.54, versus consensus of $0.59.
Analyst Michael Pachter commented, "Microsoft’s Halo 5: Guardians and Ubisoft’s Assassin’s Creed Syndicate underperformed expectations, and industry hardware sales did not accelerate after a series of price cuts. Same-store sales were down 1.1%, versus our estimate of up 5.0%, and guidance of up 1.0 – 4.0%. Non-GAAP EPS was $0.54, versus our estimate of $0.63, consensus of $0.59, and guidance of $0.53 – 0.60. F/X had a negative impact of $0.02. The EPS miss was driven by topline weakness and higher-than-expected operating expenses."
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Shares of GameStop closed at $37.61 yesterday.