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Pro Analysis

Buy GameStop on successful transformation: Macquarie

GameStop signage in a store in Peru, Illinois, March 26, 2014
Daniel Acker | Bloomberg | Getty Images
GameStop signage in a store in Peru, Illinois, March 26, 2014

Investors should buy GameStop as the video game retailer will overcome its current challenges and become more diversified, according to Macquarie, which initiated coverage on the company with an outperform rating.

"For years, we saw that investors expected digital/WMT/AMZN/BBY/mobile/real estate/publishers/etc … to kill GME. Now, in 2016, GME is still standing and looks to be evolving. Investors should focus on the cash generating potential of the legacy model in the near/mid-term while it transitions to a multi-category specialty retailer over the longer term," Macquarie's Ben Schachter wrote in a note to clients Thursday.