GameStop Corp. (NYSE: GME) has been beaten up over the course of this year, and not just as a result of COVID-19. This video game retailer has been facing slumping profits and revenues for years now and it begs the question whether it’s game over or not. However, some analysts have come out in defense of GameStop.
Recently, Telsey Advisory’s Joseph Feldman upgraded GameStop to an Outperform rating from Market Perform and raised its price target to $10 from $9.
Feldman noted that recent management conversations have given a rise in confidence ahead of new gaming Xbox and Sony console refresh ahead of the holiday season. Also enhanced operations; cutting expenses; lowering inventory; more focus on omnichannel should all combined allow GameStop to “maximize the sales of new consoles, accessories, and software titles.”
Telsey Advisory also sees leasing and trade-in options enticing gamers to buy new consoles and new gaming titles against what would otherwise by a very uncertain economic backdrop. The firm approves of GameStop cutting store locations and boosting digital capabilities while also increasing its business lines to areas like PC accessories.
Separately, Jefferies’ analyst Stephanie Wissink upgraded GameStop to a Buy rating from Hold and raised its price target to $8 from $7.
Much of this upgrade is concerned with the launching of Sony and Microsoft’s new gaming consoles. The pricing of these consoles should help out the video game retailer as events like the launching of new consoles only happen once every few years.
The company was able to avoid default risks that had been brought up previously and there is still some excitement about its new investor.
GameStop stock was last seen up about 12% at $6.83, in a 52-week range of $2.57 to $8.45. The consensus price target is $5.40.