How's The Street Reacting To Take-Two Earnings?
Here is a summary of what some of Wall Street's top analysts have to say.
Credit Suisse: Encouraged By Progress Of Digital Sales
Stephen Ju commented in a note that Take-Two's digital revenue grew 66 percent year-over-year, marking a "positive" mix shift that supports gross margin expansion. However, this will be at least partially offset by an expected higher run rate of R&D costs and higher internal royalty payments.
Despite the analyst's "encouragement" from the positive mix shift, shares are fairly valued with a "balanced" risk to reward profile.
Shares remain Neutral rated with a price target raised to $32 from a previous $28.
Pacific Crest: Near-Term Product Catalyst Still Lacking
Evan Wilson commented in a note that Take-Two's earnings beat was attributed to better-than-expected digital revenue while the revenue miss was due to the delay of "GTA V PC," which was communicated in advance.
Wilson stated that he has "not been excited" about Take-Two given expectations that it would have a "big release" in fiscal 2016 (especially "Red Dead"), which is now confirmed to not be happening. In addition, the lack of a Rockstar product catalyst sets shares up for "no material appreciation" over the next few quarters.
Shares remain Sector Weight rated with no assigned price target.
Wedbush: Fiscal 2016 Release Slate ‘Underwhelming'
Michael Pachter commented in a note that Take-Two's initial revenue guidance of $1.3 billion to $1.4 billion and earnings per share guidance of $0.75 to $1.00 is in-line with his expectations and reflects an "underwhelming" release slate. The analyst also noted that the company's guidance does not appear to include the next full "Borderlands" game, nor a full Rockstar release.
Shares remain Neutral rated with a price target raised to $26 from a previous $24.
Stifel: Fiscal 2016 Guidance ‘Encouraging'
Drew Crum commented in a note that Take-Two's fiscal 2016 guidance was above market expectations and "encouraging" given the absence of new console game(s) from Rockstar. The analyst added that this demonstrates the "ongoing diversity" across the portfolio and sets up for a "more compelling" fiscal 2017.
Shares remain Buy rated with a newly introduced $35 price target.
Latest Ratings for TTWO
|Oct 2016||Oppenheimer||Initiates Coverage On||Outperform|
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