GameStop to Rebrand EB Games Locations; Stock Falls 5%

GameStop (GME) plans to rename its EB Games subsidiary in Canada. Shares of GameStop fell 5.28% on Wednesday to close at $169.12.

The games and entertainment products retailer said EB Games locations in Canada will take on the GameStop name and brand. The rebranding will also include EB Games’ online store. The changes are expected to take place by the end of 2021. (See GameStop stock charts on TipRanks).

“This decision follows our receipt of feedback from our valued customers and stockholders,” GameStop said about the EB Games rebranding.

GameStop’s plan to rebrand EB Games comes as it is scheduled to become a component of the S&P MidCap 400 index, alongside Victoria’s Secret and GXO Logistics. The S&P and Dow Jones Indices announced that GameStop will take the place of Weingarten Realty Investors (WRI) in the index. The games retailer will subsequently vacate its place in the S&P SmallCap 600 index for Lakeland Financial (LKFN). The changes are planned to come into effect on August 4.

Ascendiant analyst Edward Woo recently reiterated a Sell rating on GameStop stock but raised the price target to $25 from $10. Woo’s new price target suggests 85.22% downside potential.

The analyst sees a small chance for a successful GameStop transformation but says there are significant digital and execution risks. According to Woo, Reddit trading may propel GameStop stock in the near term, but that would eventually fade as digital threats increase.

Consensus among analysts is a Moderate Sell based on 1 Buy, 2 Holds, and 3 Sells. The average GameStop price target of $88.33 implies 47.77% downside potential to current levels.