For GameStop (GME), among the analysts polled by Thomson Reuters on April 8, one analyst recommended a “strong buy,” one analyst recommended a “buy,” six analysts recommended a “hold,” and three analysts recommended a “sell.”
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GameStop carries a mean consensus target price of $10.09, which represents a potential upside of only 1.5% over its closing prices on April 8. In contrast, the stock had a target price of $11.91 on April 1. GameStop released its fourth-quarter earnings on April 2 after the markets closed. Several analysts lowered GameStop’s target price following its earnings release.
On April 3, Wedbush lowered GameStop’s target price from $15 to $12, while Ascendiant Capital lowered its target price from $18 to $11. Credit Suisse lowered its target price from $11 to $10. GameStop saw a selling spree after its earnings release. The stock price fell to the lowest level since 2004. While GameStop has recouped some of its losses, it’s still down 18.6% for the year. Activision Blizzard (ATVI) and Electronic Arts (EA) have seen an upwards price action of 2.9% and 24.1%, respectively, year-to-date based on their closing prices on April 8.
In the fourth quarter, GameStop missed the consensus revenue estimates and offered a dim outlook, which spooked investors. The demand for physical gaming has been witnessing a secular downtrend as more users turn to online gaming. Apple (AAPL) also announced a video gaming service last month.