Is GameStop In Store For A Solid Quarter? Oppenheimer Issues Preview

In a report published Thursday, Oppenheimer analysts maintained their Outperform rating and price target of $45 on GameStop Corp. GME. The stock represents an attractive short- to intermediate-term speculative small cap opportunity. The company is expected to report accelerated demand for new generation software, along with continuing strength in sales of new generation hardware when it reports its 1Q results on May 28. In addition, the analysts said, "Recent reports from leading publishers suggest sales of full game downloads, while growing, are still relatively small and downloadable content (DLC), a category GME sells very well, is driving digital revenues." According to the Oppenheimer report, the new Tech Brands segment is expected to contribute to the operating profit, growing by $60-$70 million in FY15, a significant increase from the FY14 levels. The analysts have cut their FY16 and FY17 EPS estimates to bring them more in-line with the consensus forecasts and the company's guidance.