Home
Investment
News & Views
Company News
news storage
Broker snap: Game Group divides opinions
Thu, 02 Sep, 2010
INVESTMENT NEWS
Company Search
Search QCK.COM
Investment Home
News & Views
Top Stories
Charting
Company Search
Watchlist
Market Reports
Market Buzz
Company News
Economic News
New Issues
Other News
Broker snap: Game Group divides opinions
Thu, 2 Jul 2009, 13:20:00
More Chart Options
Related Market Prices
Name
Value
Percent
Change
Game Group
69.40p
+5.15%
Related Articles
FTSE 250 movers: Dunelm in demand
Tue, 13 Jul 2010
FTSE 250 movers: IPF ahead of plan, shares jump
Wed, 23 Jun 2010
London close: Seventh day of gains for Footsie
Thu, 17 Jun 2010
London afternoon: Stocks drift off highest levels
Thu, 17 Jun 2010
FTSE 250 movers: Game shares hit after sales fall
Thu, 17 Jun 2010
Results from computer gaming retailer <b>Game Group</b> disappointed on Thursday morning, while the group's prospects have divided brokers KBC Peel Hunt and Charles Stanley. Charles Stanley has initiated coverage with a "buy" recommendation and a price target of 170p, though it acknowledges that the retailer is "vulnerable to the likely slowdown in industry sales" as gamers await the next generation of gaming consoles. Charles Stanley has taken the industry cycle into account when calculating its price target by applying a 50% discount to the retail sector's forward price/earnings multiple of 13. "A key bull argument is that the current product cycle is different from previous cycles because all three key hardware manufacturers have successful consoles with products attracting a broader consumer base than in prior cycles. One key risk of this steep adoption curve is that it simply leads to a "saturation" point quicker than prior cycles, which in turn, could lead to an equally steep fall on the other side of the "growth and contraction" cycle that has historically characterised prior console generations," Charles Stanley analyst Peter Smedley observed. KBC Peel Hunt has retained its "sell" recommendation and 100p price target and expects to downgrade its earnings estimates following the group's trading update. "While the installed base of new generation consoles has increased markedly against previous cycles, enjoying a much broader demographic base, we still believe the concept of the console cycle will remain the primary driver of profits," said analyst John Stevenson. "We believe absolute gross profit generation peaked in FY2009 and expect to see profit generation decline over a number of years until further major hardware releases, reflecting endemic price deflation and greater competition as product enjoys free supply," Stevenson said, adding that the growth in popularity of online gaming and digital delivery of software remains a threat to Game's business model.
©2004-2009 QCK.com
Tax Guides
|
Top 10 Tips
|
Financial News
|
Sitemap
|
Terms
|
About us
|
Contact
