GameStop Corp. (GME), the largest video-game specialty retailer, surged as much as 6 percent after an analyst almost doubled his price target, citing demand for new consoles and fewer concerns over used-games sales.
GameStop rose 4.4 percent to $39.18 at 1:12 p.m. in New York trading, after reaching $39.77. The stock has gained 56 percent this year, eighth among members of the Standard & Poor’s 500 Index (GME).
The Grapevine, Texas-based company will benefit from new consoles being released by Microsoft Corp. and Sony Corp. before the year-end holidays, according to Brian Nagel, an analyst with Oppenheimer & Co., who raised his rating on the stock to outperform, the equivalent of “buy,” from perform. Nagel, in a research note today to investors, increased his price target on the shares to $50 from $27.
GameStop’s shares have rallied this week after Sony Corp. announced its PlayStation 4 console will have no built-in restrictions on sales of used games. That stance reduces the likelihood that game publishers will prevent users from reselling used titles for Microsoft’s Xbox One, Nagel wrote.
The Xbox One limits users’ ability to share, trade and resell games, while allowing publishers to prevent used-game sales altogether.
Pre-owned games, which GameStop customers trade in for new versions, were 31 percent of first-quarter revenue, while new ones represented more than 37 percent.
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