AP News

Ahead of the Bell: GameStop


NEW YORK (AP) — The introduction of new Xbox and PlayStation consoles will allow for faster growth at GameStop, according to Sterne, Agee & Leach, which raised its price target for the video game store chain Monday.

Analyst Arvind Bhatia points out that Xbox One and PlayStation 4 are not only launching in the same year, but they're going to be launched globally. That's a departure from the past, when the Xbox 360 launched in 2005 and PlayStation 3 debuted in 2006. Neither launch was global.

The Xbox One and PS4 give GameStop the opportunity to ramp up sales faster, Bhatia said.

GameStop has cemented its partnership with vendors thanks to the strength of its distribution network, Bhatia said. It's also been able to capitalize on the growing popularity of mobile games, played on cell phones and other devices, Bhatia said, and its used games business has improved.

Bhatia maintained his "Buy" rating and increased the company's price target to $55, from $46.

A representative for GameStop did not immediately respond to an email seeking comment.

GameStop Inc. will report second-quarter financial results Thursday.


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