Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: GameStop (NYSE: GME), Activision (Nasdaq: ATVI), Microsoft (Nasdaq: MSFT) and Sony (NYSE: SNE).
See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673
Here are highlights from Thursday's Analyst Blog:
Don't Stop Buying GameStop
We are increasing our estimates ahead of GameStop's (NYSE: GME) third quarter earnings report, which is scheduled for November 20. Our higher estimates are a result of the strong results out of Activision (Nasdaq: ATVI), and scorching Halo sales during the quarter.
GameStop is well-positioned to take advantage of what is sure to be a robust holiday season for video games and systems. The current video game cycle is hot right now because of the three next-generation platforms: Nintendo Wii, Microsoft (Nasdaq: MSFT) XBOX360, and Sony (NYSE: SNE) PlayStation 3.
The company's success is not tied to any one of these systems or any particular video game company. GameStop's growth comes from the continued popularity of all video games. All told, GameStop remains our favorite stock in the retail sector. We reiterate our Buy rating and increase our target price from $60 to $65, which represents a P/E-to-growth ratio of 1.3x our fiscal 2008 EPS estimate.
GME shares are trading at 32.1x our 2007 EPS and 25.0x 2008 EPS estimate. We think GameStop's industry-leading footprint, strength in the used video game market, and the early stages of the video game product cycle make GME shares a solid long-term holding. We think the company's robust growth justifies a premium multiple. Our target price of $65 is based on P/E-to-growth ratio of 1.3x our 2008 EPS estimate.
See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645
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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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The performance of the Zacks Rank portfolios shown above for annual and year-to-date periods are the linked monthly total returns (price changes + dividends) of equal weighted hypothetical portfolios, consisting of those stocks with the indicated Zacks Rank, assuming monthly rebalancing and zero transaction costs. These are not the returns of actual portfolios. The hypothetical portfolios were created at the beginning of each month from Jan 1988 forward based on the values of the Zacks Rank available to Zacks' clients before the beginning of each month. The portfolios created monthly from 1988 through September 2006 exclude ADRS and are comprised of stocks that have the indicated Zacks Rank and were covered by at least two analysts at the time of the stocks inclusion in the portfolio. Starting in October 2006 and going forward, the portfolios are comprised of all stocks with the indicated Zacks Rank and do not exclude ADRs, which is more reflective of the list of stocks that customers will find on the Zacks web sites. 2007 returns are for the period of Jan 1 - Jun 30, 2007. These performance numbers have been audited from 1995 through 2003 by Autschuler Melovan, a division of American Express Financial.
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