GameStop Stock: Next Stop, $2.50?
GameStop (NYSE: GME) is a sinking retailer stock looking for a floor, and at least one Wall Street pro thinks the near-term bottom will be even lower than where the shares are now. Bank of America Merrill Lynch analyst Curtis Nagle is slashing his price target for the stock from $4 to what is now a Street-low $2.50, a move that implies another 30% of downside for one of this year's worst-performing investments.
GameStop stock has plummeted 72% this year as the turnaround hopes for the video game retailer continue to diminish. Nagle is not impressed by this year's slate of game releases, which pose an earnings risk to a chain that's already reeling. The shift from physical game discs and cartridges to direct digital delivery is also eating into the high-margin preowned segment that at its prime was the real growth driver here. With a potential sale of the company and once-chunky yield off the table, there just isn't a lot for investors to get excited about -- but it's not as if the retailer is going to close up shop overnight.
Image source: GameStop.
Source Fool.com
