Wedbush Reiterates on GameStop on Expected Q3 Upside from Multiple Positive Catalysts

In a report published Monday, Wedbush analyst Michael Pachter reiterated an Outperform rating and $60.00 price target on GameStop Corp. GME. In the report, Wedbush noted, “Our estimates are for revenue of $1.99 billion, comps of +15% and EPS of $0.58, vs. consensus of $1.98 billion and $0.56, and guidance of up +11 – 15% comps and EPS of $0.50 – 0.55. NPD combined console/handheld HW and SW sales for Q3 were up just over 15%, and GameStop has consistently gained market share all year, with likely over-allocations of Take-Two's GTA V. We expect an EPS beat from top-line growth, repurchases ($311 million remaining), and digital and mobile growth. Implied FY digital revenue guidance of $788 – 851 million implies $456 – 519 million in 2H (vs. $378 million in 2H:12) at an estimated 40% margin. Implied FY mobile revenue guidance of $239 – 258 million implies $137 – 156 million in 2H (vs. $143 million in 2H:12) at an estimated 30% margin.” GameStop closed on Friday at $56.53.