GameStop Investors: BofA Says To Buy On 'Next Gen Gains'

In a report published Friday, Bank of America Merrill Lynch analyst Curtis Nagle reiterated his Buy rating on

, with a price target of $52, following the robust Q1 results reported by the company. The Q1 results marked another quarter of strong software outperformance, as well as robust attachment of digital content. "As we have been arguing, we continue to see 2015 as an inflection year for GME both in terms of increasing leverage of the next gen cycle as well as improving sentiment," Nagle said. The company also raised its FY15 guidance to reflect accretion to the EPS due to the buybacks, year to date. The analyst believes that there are several key drivers for the company's performance in 2015 and beyond, such as its incredibly robust software pipeline for 2H, which includes

,

and a new version of

, among others. The increasing importance of the high growth Tech Brands business, combined with the newly introduced collectibles business, is also expected to drive growth. Among the other drivers are "reacceleration of the used business as next gen inventory builds; solid digital performance; and a sector leading free cash flow yield of over 10% supporting opportunistic buybacks and dividend increases," Nagle added.