Shares of GameStop Corp. tumbled more than 8.5% Friday morning following a very bearish analyst note and downgrade on the company’s stock by Benchmark. Analysts at Benchmark cut their rating to sell from hold following GameStop’s quarterly earnings report. They said the company’s core business model, which includes the physical distribution of hardware, software and used products through retail stores, will be “increasingly displaced” from growing consumer adoption of digital, streaming and subscriptions content service channels. “We believe the console will complete the turn to digital within the next 5 years, which would effectively dislocate the company’s performance foundation,” the analysts said. However in a separate note to clients, Sterne Agee CRT touted GameStop’s diversification efforts and said that it thinks by 2019, as much as 33% of GameStop’s operating profits could come from non-gaming areas. Sterne Agee raised its price target to $52 from $47. Shares of GameStop fell to $42.21 in recent trade. They are up about 3% in the last three months, compared with a 6.5% decline for the broader S&P 500.
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