Investing.com -- Piper Sandler has initiated coverage of Take-Two Interactive with an Overweight rating and a $280 price target, arguing that the upcoming launch of Grand Theft Auto VI could become one of the largest entertainment releases in history and drive substantial earnings growth over the next several years.

Analyst James Callahan forecasts Take-Two shares could rise roughly 22% from current levels, citing unprecedented demand for GTA 6, improving performance in the company's mobile gaming division, and the firm's position as one of the few remaining independent large-scale gaming publishers.

Piper's bullish thesis centers on GTA 6, scheduled for release in November 2026. The report highlights that more than 13 years have passed since the launch of GTA 5, creating what it describes as a unique demand environment for the franchise. Analysts estimate GTA 6 could sell more than 35 million units in its first fiscal year, with potential upside beyond that figure.

The firm also believes today's streaming ecosystem—including creators such as IShowSpeed and Kai Cenat—will serve as a powerful marketing engine that did not exist when GTA 5 launched in 2013. Twitch viewership and creator activity have increased dramatically over the past decade, potentially expanding GTA 6's reach beyond traditional gamers.

The report also points to improving trends within Take-Two's mobile segment, acquired through its purchase of Zynga in 2022. Piper highlights stronger engagement from titles such as Toon Blast and Match Factory!, along with benefits from adopting advertising technology from AppLovin.

According to the analysis, Wall Street expectations for mobile bookings remain conservative despite evidence of accelerating growth and improved monetization.

Piper argues that industry consolidation has left Take-Two in a unique position. Following major acquisitions such as Microsoft acquisition of Activision Blizzard and other large gaming transactions, Take-Two remains one of the few independent publishers with ownership of major franchises including GTA, Red Dead Redemption, and NBA 2K.

The firm believes this scarcity value, combined with recurring revenue from online services and in-game purchases, justifies a valuation premium versus historical averages.

Addressing investor concerns that Take-Two's stock could decline after GTA 6 launches, Piper argues that the traditional "buy the hype, sell the news" narrative is outdated. The report notes that Take-Two's business today is supported by recurring consumer spending from online services and microtransactions, reducing dependence on one-time game sales. Historical analysis also suggests the company's shares have often outperformed the broader market in the year following major game launches.

Piper forecasts fiscal 2028 revenue of approximately $8.6 billion and non-GAAP earnings per share of $8.66, using a valuation multiple of roughly 32 times earnings to derive its $280 target price. The firm notes that launch-year guidance for major Take-Two releases has historically proven conservative and sees potential for earnings upside if GTA 6 exceeds expectations.

Bottom line: Piper Sandler views Take-Two as a premier gaming asset entering what could be its most important product cycle ever, with GTA 6, improving mobile performance, and industry consolidation providing multiple avenues for long-term growth.