Oppenheimer Sees GameStop Corp. as Underappreciated EPS Growth/Upside Story

In a report published Tuesday, Oppenheimer analyst Brian Nagel reiterated an Outperform rating and $47.00 price target on GameStop Corp. GME. In the report, Oppenheimer noted, “GameStop represents one of the most under-appreciated EPS growth/upside stories in Hardlines, in our view. We believe GME is well-positioned to capitalize upon the launches of Xbox One and PS4. Last week's Q4 (Mar.) results from Electronic Arts (EA) sparked renewed fears of 'digital disintermediation' amongst GME investors. Herein we evaluate recent data and reassess the risks of digital downloads. We do not dismiss the long-term "digital threat" for GME. In the nearer-term, however, we expect market share gains and improving consumer demand will offset an only modest shift to full game downloads. EPS expansion is key for GME, as we do not envision meaningful multiple expansion so long as digital distribution remains in the minds of investors.” GameStop Corp. closed on Monday at $36.82.