Bank of AmericaContinue BearishGameStop, with a "sell" rating and a target price of $10.
Analyst Curtis Nagle noted: "As we have highlighted many times,GameStopThe problem is that its development is out of touch with the company's fundamentals. The latest console sales data is not optimistic, which shows that GameStop's physical store sales are still facing huge challenges. "
Nagle added: "While the release of the new generation of game consoles is relatively small, the total sales of physical games seem very disappointing. In fact, so far, only 0.65 physical games have been sold for every PS5 and Xbox Series X/S console sold. We will continue to monitor this trend, but the decrease in physical new game sales may be partly due to the surge in digital game penetration."
The launch of a new generation of gaming consoles drove GameStop's sales of hardware devices to rise 95% in January, while benefiting from favorable market pricing, with sales up 147%. However, Nagle noted that PlayStation/Xbox sales were only 10% of the same period level of the previous cycle.
In addition, Nagle believes that the current situation of "supply outstripping demand" will continue to play a role despite strong "underlying" demand.
Based on 4 hold ratings and 3 sell ratings, GameStop has a consensus rating of "sell" and an average target price of $14.83, implying a 72% downside to its stock price over the next 12 months from current levels.
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