Take-Two Interactive Software (TTWO): Looking Ahead To The Next Red Dead - BMO
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BMO Capital analyst, Gerrick Johnson, reiterated his Outperform rating on shares of Take-Two Interactive (NASDAQ: TTWO) after the company reported 1Q17 non-GAAP as previously defined (NGPD) loss per share of ($0.34), $0.05 per share wider than our and the Street consensus estimates of ($0.29). The result was within the previously guided range of ($0.30) to ($0.40). The company maintained its FY2017 NGPD EPS guidance of $1.00-$1.25, while lifting NGPD sales guidance by +3%, or $50 million, to $1.55-1.65 billion.
The company saw significant outperformance of Grand Theft Auto 5, as well as overall recurrent digital spending. However, this offset a poor performance by Battleborn, a new IP released in May, which weighed on the results. The company has a strong pipeline for the back half, with Mafia III, Civilization VI, and XCOM 2 for consoles.
For most investors, the key to the story is management's comment that Rockstar, "is hard at work on exciting future projects to be revealed soon." Thus, excitement continues to build for a sequel to Red Dead Redemption and may be beginning to build for the eventual release of Grand Theft Auto 6.
Price target increases to $48.00.
**Shares of TTWO are up 12% since 5/19, when the stock was highlighted in the Stealth Growth Insider newsletter. For a free trial, click here
Shares of Take-Two Interactive closed at $41.37 yesterday.
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