Wedbush Morgan Downgrades Take-Two Interactive Software (TTWO) to Neutral; Valuation Call
TTWO Hot Sheet
Rating Summary:9 Buy, 5 Hold, 0 Sell
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Wedbush Morgan downgrades Take-Two Interactive Software (Nasdaq: TTWO) from Outperform to Neutral.
Wedbush analyst says, "We are lowering our rating for Take-Two to NEUTRAL due to valuation. Our $13 price target, which reflects a forward multiple of 15x estimated sustainable EPS of $0.80 (fully-taxed) plus $1/share in net cash reflects only 10% upside from current levels. The target multiple is at the low end of Take-Two's historical range, and reflects the company recent earnings volatility and market contraction. We acknowledge that this downgrade may appear “early” in light of the company’s positive outlook for FY:10 due to the many game shifts from FY:09 and expected industry catalysts from hardware price cuts. Sony and Microsoft cut the price of the PS3 and 360 in late August, and we expect Nintendo to cut the price of the Wii to $199 by the end of the month. We expect a solid FY:10, and an announcement of the next installment of Grand Theft Auto by mid-June at the E3 Expo. In our view, the company’s share price fully reflects an increasingly positive outlook and the lack of other company specific catalysts."
To see more analyst ratings on TTWO Click Here.
Take-Two Interactive Software, Inc. publishes, develops, and distributes interactive entertainment software, hardware, and accessories worldwide.
Wedbush analyst says, "We are lowering our rating for Take-Two to NEUTRAL due to valuation. Our $13 price target, which reflects a forward multiple of 15x estimated sustainable EPS of $0.80 (fully-taxed) plus $1/share in net cash reflects only 10% upside from current levels. The target multiple is at the low end of Take-Two's historical range, and reflects the company recent earnings volatility and market contraction. We acknowledge that this downgrade may appear “early” in light of the company’s positive outlook for FY:10 due to the many game shifts from FY:09 and expected industry catalysts from hardware price cuts. Sony and Microsoft cut the price of the PS3 and 360 in late August, and we expect Nintendo to cut the price of the Wii to $199 by the end of the month. We expect a solid FY:10, and an announcement of the next installment of Grand Theft Auto by mid-June at the E3 Expo. In our view, the company’s share price fully reflects an increasingly positive outlook and the lack of other company specific catalysts."
To see more analyst ratings on TTWO Click Here.
Take-Two Interactive Software, Inc. publishes, develops, and distributes interactive entertainment software, hardware, and accessories worldwide.
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