GameStop Shares Gain on Jefferies, Telsey Upgrades

GameStop was upgraded at two investment firms. Analysts are bullish on the sales potential of new gaming consoles from Sony and Microsoft.
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GameStop  (GME) - Get Report shares got a boost after analysts at Jefferies and Telsey upgraded the videogame retailer's stock less than a week after the company reported earnings.

Analysts at Jefferies upgraded the stock to buy from hold as the Grapevine, Texas, company should benefit from the next-generation of gaming consoles from Sony  (SNE) - Get Report and Microsoft  (MSFT) - Get Report that are scheduled to launch this fall. 

Jefferies also raised its price target on GameStop to $8 a share from $7. 

At Telsey, analysts upgraded the stock to outperform from market perform, also due to the launch of the two gaming consoles. 

Analysts at Telsey say the stock "should see upside in the near term, as both earnings and valuation expand from current levels," Bloomberg reported. 

Telsey raised its price target to $10 from $9.

GameStop shares at last check rose 9% to $6.65.  

Last week, Microsoft said that the Xbox Series S would be priced at $299 while its beefier Xbox Series X would cost $499 and be available for preorder on Sept. 22. 

Meanwhile, Sony has not specified the price of the PS5, but the console will also have a full and skinny version with two different costs. 

Last week, GameStop reported that its net loss shrank to $1.71 a share from $4.15 a share in the year-earlier quarter. The latest adjusted loss from continuing operations was $1.40 a share.

Net sales fell 27% to $942 million from $1.29 billion. Comparable-store sales fell 12.7%.

Analysts surveyed by FactSet were expecting the company to report a GAAP net loss of $1.23 a share, or an adjusted $1.13, on revenue of $1.02 billion.

The same-store sales bettered analysts' estimate of a 21.5% decline.