Analyst: Industry growth is peaking
Goldman Sachs downgrades GameStop stock, says growth numbers will slow down in back half of the year.
March's US retail sales figures were through the roof, but one analyst thinks the current growth rate can't be sustained for long. MarketWatch is reporting on a note to investors from Goldman Sachs analyst Robert Higginbotham, who recently downgraded his assessment of stock in retailer GameStop to a "sell" rating.
According to Higginbotham, GameStop shares are "poised for a pullback as industry growth remains on a path toward deceleration from its current peak," suggesting not that the industry itself has peaked, just that growth figures later in the year likely won't be quite as impressive as March's 57 percent spike.
"While the much anticipated release of GTAIV at the end of April is expected to produce record sales, and Wii Fit, slated for May, is also expected to be a blockbuster, the remainder of the year lacks any big releases," Higginbotham noted, "and comparisons get tougher throughout the year as we lap titles such as Halo 3 and Guitar Hero III."
For the full-year, Higginbotham is forecasting 12 percent growth over 2007's US retail sales take of close to $19 billion (including PC).
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