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In a report published Tuesday, Piper Jaffray analyst Michael J. Olson maintained an Overweight rating on
GameStop Corp, with a price target of $56.
Analyst Michael Olson expects GameStop to report in-line July quarter results, with EPS of $0.24 and revenues of $1.73 billion. The NPG next generation SW sales, including Wii U, constituted 68 percent of GameStop's total sales in the July quarter. This was up from the 45 percent level in the year-ago period.
Olson believes that GameStop would maintain its FY15 guidance, with SSS in the range of +1 percent to +6 percent and EPS of $3.60-$3.80. The company's FY15 guidance is expected to remain modestly below the Street estimates partly due to GameStop's EPS guidance not including share repurchases.
"We believe FY15 guidance may prove low, however, as assumptions appear conservative in the midst of a faster than expected uptake of next gen consoles, which has triggered a renewed growth phase for software," Olson wrote.
In the report Piper Jaffray noted, "…we continue to believe GameStop is well positioned to benefit from a renewed growth period within the industry driven by uptake of the PS4 and Xbox One."
GameStop's current stock valuation does not reflect the company's EPS growth prospects, the report added.
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