GameStop shares climb after Janney upgrades to ‘Buy’

GameStop shares climb after upgrade

NEW YORK — Shares of GameStop Corp. climbed Thursday after a Janney Capital Markets analyst upgraded the world’s largest video game retailer saying its launch of new loyalty programs could improve its position in the evolving games landscape.

THE SPARK: In a rare step for brick-and-mortar retailers, GameStop is making a push into selling digitally downloadable video game content in its stores. The company said after its earnings announcement last week it will start selling the downloads in a group of test stores starting at the end of May. The company is also launching a loyalty program

THE BIG PICTURE: Downloads of video game content are an increasingly important revenue source for game companies because they help extend the life of and revenue from big-budget packaged titles.

THE ANALYSIS: GameStop stands to benefit from these programs, and the looming launch of new gaming technologies, such as new motion controllers from Sony and Microsoft and 3D gaming, should also boost results, according to Janney analyst Tony Wible. He upgraded GameStop to “Buy” from “Neutral.”

SHARE ACTION: Shares rose $1.23, or 5.7 percent, to $22.89 in afternoon trading. The stock has traded in the 52-week range of $17.12 and $28.62.