Market Overview

Credit Suisse: GameStop 'On Pause,' Lowers Price Target

Share:

Following GameStop's (NYSE: GME) third-quarter results on Thursday, Seth Sigman of Credit Suisse reiterated a Neutral rating on shares with a price target lowered to $44 from a previous $46.

"GameStop reported weaker Q3 results and lowered its Q4 guidance, which we expect to send the stock down given much higher expectations in the market," Sigman wrote in a note to clients on Friday. The analyst adds that a "lack of visibility and pressure in numerous areas" justifies staying on the sidelines.

GameStop's fourth-quarter guidance includes comps of -5 percent to +2 percent, vs. a prior guidance of +12 percent.

According to Sigman, GameStop needs to show signs of life in software sales given the rise of game manufactures offering digital sales. In addition, GameStop's sales of used games could come under pressure as Wal-Mart Stores, Inc. (NYSE: WMT) continues to push into the space.

The analyst points out that GameStop saw weakness in last-generation software sales and notes that this could "seep" into the used category segment as last-generation likely still accounts for a large portion of used games sales.

Bottom line, GameStop's fourth-quarter guidance could represent a "lower bar" that could create a set up for stock, but it is too early to determine that, according to Sigman.

Latest Ratings for GME

DateFirmActionFromTo
Oct 2020JefferiesDowngradesBuyHold
Sep 2020Telsey Advisory GroupUpgradesMarket PerformOutperform
Sep 2020JefferiesUpgradesHoldBuy

View More Analyst Ratings for GME
View the Latest Analyst Ratings

 

Related Articles (GME)

View Comments and Join the Discussion!

Posted-In: Credit Suisse gamestop Seth Sigman video games Wal-MartAnalyst Color Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
NVDASusquehannaMaintains625.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com