Take-Two Is Now Worth Less, Credit Suisse Says

In a report published Tuesday, Credit Suisse analysts maintained a Neutral rating on

, while reducing the price target from $32 to $28. Take-Two reported 4Q15 adjusted EPS of $0.49, significantly ahead of the guided range of $0.15-$0.25. The upside was driven by increased cost discipline. The company's revenues for the quarter stood at $427.7 million, in-line with the guidance. "Digital revenue grew 66% year over year driven by full game digital downloads and GTA Online. This positive mix shift towards digital should drive continued gross margin expansion," the analysts mentioned. "We have increased our unit volume assumptions for the PC version of Grand Theft Auto V, Battleborn, and the AAA 2k title slated for FY16 which we assume to a BioShock Sequel," the analysts added. The company has guided to FY16 revenue of $1.3-$1.4 billion and adjusted EPS of $0.75-$1.0. In the report Credit Suisse noted, "We are encouraged by the continued progress of digital sales on console and recurrent consumer spending, but maintain Neutral rating primarily on balanced risk/reward." The EPS estimate for FY16 has been raised from $0.98 to $1.00, while the EPS estimate for FY17 has been reduced from $3.35 to $3.24 to reflect a higher run rate of R&D costs.