Sterne Agee Says Buy Gamestop (GME)

Sterne Agee has a Buy rating and a $26 price target on shares of GameStop Corp. GME. In a note sent to clients, Sterne Agee writes, "We think GME continued to do well in new software driven by hard core titles, the company's PowerUp Reward loyalty program and a promotional environment that seemed no more aggressive than last year. On used software, we believe GME is likely to hit at least the lower end of its guidance of +8% to +12%, driven by easier comparisons, a longer promotional period for its Buy 2 Get 1 Free used games promotion (may be a slight negative for used margins) and limited competition. On hardware, we think GME had its normal market share. That said, we expect only modest upside for GME from Kinect, given it was somewhat supply constrained and our belief Best Buy had an edge (its ability to demo the product may have helped)." Shares of GME lost 1 cent yesterday to close at $22.51.