Sterne Agee CRT Upgrades Take-Two Interactive (TTWO) to Buy
Sterne Agee CRT upgraded Take-Two Interactive (NASDAQ: TTWO) from Neutral to Buy with a price target of $32.00, saying FY16 guidance appears conservative.
Analyst Arvind Bhatia commented, "We are upgrading shares of TTWO from Neutral to Buy and establishing a 12-month target price of $32 based on 15x our FY17 EPS estimate of $1.50 + cash. With the potential risk of weak FY16 guidance now behind us, we think the stock is attractive. First, we think FY16 guidance is conservative. Second, we think FY17 will include the next iteration of Red Dead, which will prove to be a catalyst. Third, we think the company’s strong balance sheet (~$9 in cash per share) and strong recurrent (digital) revenue provide downside protection. A new 10M share buyback program announced yesterday should further support the stock price in the near to medium term."
the firm is lowering FY16 revenue/EPS estimates to $1.4B/$1.00 from $1.5B/$1.22. They are introducing our FY17 revenue/EPS estimate of $1.55B/$1.50, respectively.
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Shares of Take-Two Interactive closed at $24.20 yesterday.