Take-Two Interactive (TTWO) PT Lifted to $40 at MKM Partners
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Rating Summary:
32 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
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MKM Partners analyst Eric Handler reiterated a Buy rating and raised his price target on Take-Two Interactive (NASDAQ: TTWO) to $40.00 (from $35.00) following strong Q3 results which was once again fueled by GTA.
Handler commented, "Take-Two far exceeded 3Q projections with EPS of $1.86 versus our above consensus $1.54 estimate. Based on this outperformance and what is likely a conservative 4Q outlook, we believe the company may surpass what was previously our optimistic FY15 EPS scenario of $1.75. Furthermore, levers are still in place to push EPS above our new $1.80 forecast (up from $1.44). With FCF for the year now in positive territory, unencumbered cash has risen to $977mn (>$8.70 p/s), or more than 25% of Take-Two's market cap. Driven by expectations for sustained profits and positive FCF generation, we believe pressure to return capital will grow. We are raising our PT to $40 from $35 based on 18x our 2-year average EPS plus cash."
The firm raised FY15 EPS to $1.80 from $1.44 and remain above guidance of $1.65-$1.75 (which is up from $1.05-$1.30) and slightly raised FY16 EPS to $1.55 from $1.50 based on an increased revenue outlook of $1.67bn, up from $1.63bn and a higher operating margin forecast of 11.5% versus our prior expectation of 9.9%.
For an analyst ratings summary and ratings history on Take-Two Interactive click here. For more ratings news on Take-Two Interactive click here.
Shares of Take-Two Interactive closed at $29.84 yesterday.
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