Goldman Sachs Reiterates Neutral Rating On GME

Goldman Sachs is reiterating its Neutral rating on GameStop Corp. GME shares despite modest valuation, as structural industry declines “drive our EPS forecasts 3%-5% below the Street for 2011-2012.”

“Increased digital penetration and the lack of a new product cycle outweigh our expectation for continued market share gains, sizeable success for the firm's digital effort, the lucrative used niche, and large buybacks,” Goldman Sachs writes.

GameStop closed Friday at $19.77.