Take-Two Interactive (TTWO) PT Raised to $155 at Benchmark on Strong 1Q Earnings, Omen of More to Come and Emphasis on Recurrent Consumer Spend

May 21, 2020 10:56 AM EDT
Get Alerts TTWO Hot Sheet
Price: $171.28 +2.26%

Rating Summary:
    27 Buy, 10 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 11 | New: 19
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Benchmark analyst Mike Hickey raised the price target on Take-Two Interactive (NASDAQ: TTWO) to $155.00 (from $149.00) while maintaining a Buy rating following results, citing the virus as an accelerator for gaming, and a few games specifically standing out in performance as of late, being the GTA, RDR, Borderlands, and NBA2K franchises. Even after the virus, the argument is made that playing these games will become a trend consistent even after the virus, causing recurrent consumer spend (RCS) and driving growth and profit.

The analyst stated "TTWO delivered better than consensus F4Q20 results, initiated a strong F1Q21 guidance and a conservative FY21 financial view based on no AAA frontline releases and not passing through virus influenced elevated engagement into F2H21 period. Performance upside was primarily attributable to Grand Theft Auto, Red Dead Redemption, Borderlands and NBA2K franchise games and related recurrent digital Live Services. We suspect elevated player engagement in existing games and Live Service will have a sustained benefit toward future growth and see virus accelerants toward existing trends including migration to digital through both delivery and recurrent consumer spend (RCS). TTWO has successfully grown its normalized earnings over time, a trend we anticipate to continue. TTWO has ample cash, free cash flow and initiated a view for sequential growth in FY22."



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