GameStop Losing Its Game

NEW YORK (TheStreet) -- GameStop(GME Quote) was removed from Goldman Sachs' conviction buy list on Wednesday, sending the company's shares into the red.

While Goldman still maintains its buy rating on the stock, it said it sees "less upside to near-term earnings" after the company reaffirmed its original quarterly financial guidance.

On Tuesday, the video-game retailer said it still forecasts third-quarter earnings in the range of 27 cents to 33 cents a share and expects same-store sales to decline by 6% to 11%.

Analysts call for the company to earn 30 cents a share in the quarter.

Goldman is also worried about October video-game sales, which are due out Thursday afternoon from the NPD Group.

Analyst Robert Higginbotham said that estimates for sales declines of 9% to 11% are too optimistic, since GameStop's results must go up against a 35% surge in sales in the same month last year. He believes October sales will plunge 20%.

Shares of GameStop fell 2.3% to $24.60 in morning trading Wednesday.

--Reported by Jeanine Poggi in New York.

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