GameStop Shares Off Session Lows As SunTrust Defends
Amid news that Wal-Mart (NYSE: WMT) will begin offering store credit in exchange for used video games, SunTrust released a note in which analyst David Magee maintained his buy rating on GameStop (NYSE: GME) with a $60 price target.
In his note, Magee wrote that he does not think this move by Wal-Mart will threaten GameStop unless they were to become "particularly aggressive" with both pricing and advertising. Furthermore, Magee pointed to GameStops "more efficient" distribution channels, as a reason for Wal-Mart to possibly sell collected trade-in games to GameStop.
In reaction to the news of Wal-Mart entering the used video game market, GamesStop was trading down as much as six percent. Since the release of the SunTrust note, GameStop shares have rebounded slightly.
At last check, GameStop was trading down 3.5 percent at $38.36.
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