Shares of video game retailer GameStop rose in premarket electronic trading Friday after analysts predicted the company will surpass its new full-year profit forecast.
GameStop reported stronger second-quarter results than analysts expected Thursday, and increased its outlook for the year to $1.45 to $1.48 per share from $1.39 to $1.42 per share. Analysts said Friday that the new estimate is conservative.
Analysts polled by Thomson Financial expect GameStop to earn $1.50 per share for the year ending in January.
Citi Investment Research analyst Tony Wible retained a "Buy" rating on the stock, and raised his price target to $57.50 per share from $46. He said sales of gaming systems are growing, which will support better game sales for the rest of the year.
"The growth of the casual gamer appears to be continuing, driven by the diversity of software and hardware," he said. "The expanding base should help drive record-breaking software sales in the back half of the year and should add visibility heading into 2008."
First Albany analyst William Lennan upgraded GameStop shares to "Strong Buy" from "Buy," and raised his price target to $60 from $50. He said the second-quarter results were "exceptional," and said the company could top estimates for the next six quarters.
Shares rose 80 cents to $48.25. The stock closed Thursday at $47.45, up 9.3 percent.