Sterne Agee CRT Reiterates Buy Ahead of GameStop (GME) 1Q Results

Sterne Agee CRT reiterates a Buy rating and $45.00 price target on GameStop (NYSE: GME) leading up to GME's 1Q earnings report. Analyst Arvind Bhatia believes that the stock seems favorable. GME is scheduled to release 1Q earnings results on May 28th after market close.

Bhatia commented on GME, saying, "NPD Data for GME's F1Q (Feb-Apr) shows US video game industry sales up 1%, including new software up 4%, accessories sales up 8%, offset by hardware dollars down 7% y/y. We believe GME outperformed the industry during the quarter and remain comfortable with our same-store-sales (ex FX) projection of +3.8%, which is essentially in line with consensus projection of +4%, The company's SSS guidance for the quarters is +2.5% to +5.5%."

Bhatia also added, "Margins and EPS. We are modeling flattish margins y/y. Our gross margin estimate for F1Q is 31.6% versus 31.4% in the year-ago period. Our operating margin estimate of 5.2% compares to 5.3% in the year ago period. Our EPS estimate of $0.57 compares to $0.59 in the year-ago period, consensus $0.59 and guidance $0.53 to $0.60 respectively."

For an analyst ratings summary and ratings history on GameStop click here. For more ratings news on GameStop click here.

Shares of GameStop closed at $40.80 yesterday.

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