UPDATE: Goldman Sachs Reinstates Take-Two Interactive (TTWO) at Buy, Sees Theoretical M&A Value at $268 'making it a potential M&A candidate'
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Goldman Sachs reinstates coverage on Take-Two Interactive (NASDAQ: TTWO) with a Buy rating and a price target of $234.00.
The analyst comments "TTWO is a best-in-class video game developer & publisher that should benefit from its live services momentum and a healthy upcoming game pipeline, while the transition to next-generation consoles should help catalyze price increases across its portfolio (e.g., GTA V, GTA Online, NBA2K). We reinstate TTWO at Buy with a 12-month price target of $234 based on a blended fundamental (85% weight)/M&A (15% weight) valuation methodology. Our fundamental value reflects 28X NTM+1Y EPS, which is consistent with the average NTM EPS for ATVI, EA, and TTWO. Our theoretical M&A value reflects 24X our NTM+1Y EBITDA, which the average transaction multiple for select content acquisitions. Our theoretical M&A value of $268 reflects our view that TTWO has a high-quality gaming portfolio and is sub-scale relative to video gaming peers (e.g., below peer margins), making it a potential M&A candidate."
Shares of Take-Two Interactive closed at $205.56 yesterday.
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