GameStop Announces Repurchasing Program

GameStop Corp. GME authorized a new $500M debt and equity repurchase program, expecting to repurchase $300M in equity and retire $200M in senior notes, which would add ~$.29 to non-GAAP EPS on an annual basis, according to Piper Jaffray, which believes that GameStop should continue its efforts to repurchase and reduce its store base. Piper Jaffray makes no changes to its estimates, leaving GameStop with a Neutral rating and $18 price target, and if it can be assumed that no further deterioration will to revenues will occur, the repurchase program could yield higher EPS estimates for FY2010/2011. GameStop Corp. closed yesterday at $18.59.