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Why 'Red Dead Redemption 2' Matters For Take-Two

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Why 'Red Dead Redemption 2' Matters For Take-Two

Gamers are hyped for the fall release of "Red Dead Redemption 2" — and so are market analysts. Wedbush Equity Research anticipates the Take-Two Interactive Software Inc (NASDAQ: TTWO) game to be one of the biggest releases of 2017.

The firm predicts an annual sale of 18 million units — a figure considered too conservative “given a long wait and the success of 'Grand Theft Auto V.'”

Hesitation To Upgrade

Despite the profit-driving launch of "Red Dead Redemption 2," Wedbush is hesitant to issue a Buy rating on the company, which has a light product lineup for the following three quarters.

“There is little doubt that the games announced so far will perform very well, but without additional titles, we are hard pressed to see how Take-Two can meaningfully grow revenues or profits,” analysts wrote in a Wednesday note.

The presently bare slate might serve the company well, though. With only "NBA 2K" and "Red Dead" on the docket, Wedbush expects later announcements of holiday releases to catalyze investor interest in the immediate future.

Staying At Neutral

Nevertheless, the firm maintains a Neutral rating on Take-Two shares with a 12-month price target of $48.

Risks include dynamic macroeconomic factors, changing consumer demand and market competition.

Activision Blizzard, Inc. (NASDAQ: ATVI) and Electronic Arts Inc. (NASDAQ: EA) are expected to deliver strong products throughout the year, including respective releases of a new "Call of Duty" and "Mass Effect Andromeda."

Shares of Take-Two were trading up 1.18 percent at $54.34 at last check.

Image Credit: By Rockstar Games (Aus Rockstar-Games-PDF) [Public domain], via Wikimedia Commons

Latest Ratings for TTWO

DateFirmActionFromTo
Feb 2021Wells FargoMaintainsOverweight
Feb 2021WedbushMaintainsOutperform
Feb 2021Cowen & Co.MaintainsOutperform

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