How Upcoming Game Reveals Could Catalyze Take-Two Interactive's Growth: Analyst Take

Truist Securities analyst Matthew Thornton reiterates Take-Two Interactive Software Inc TTWO with a Buy and a $158 price target.

The re-rating builds on expectations of higher bookings and EPS in FY26 and favorable valuation multiples compared to industry peers.

FY24 Outlook: The consensus hurdle for FY24 is considered low, with potential game-reveal catalysts driving expectations.

Game Releases: The anticipation of a 31st Union title and a possible remake of Red Dead Redemption 1 generate excitement among investors.

Updated Model: The model for FY24 assumes earnings per share (EPS) of $3.97 and bookings of $5.65 billion, surpassing the consensus estimates of $3.37 and $5.57 billion, respectively.

Future Game Reveals: It is expected that game reveals throughout FY24, including GTA, 31st Union, BioShock, and a potential RDR1 remaster, could act as catalysts for the company.

First Quarter 2024: The first quarter is likely to have a low hurdle, with bookings estimated at $1.26 billion and EPS at $0.66, surpassing consensus estimates of $1.22 billion and $0.38, respectively.

Reasonable Assumptions: Key assumptions for the first quarter include revenue from Consumer Spending (RCS) and full-game sales, gross margin, and below-the-line items in line with guidance.

Future Years: FY25 is modeled with an EPS of $7.77 and bookings of $8.04 billion, while FY26 is likely to have an EPS of $8.89 and bookings of $8.49 billion.

Price Action: TTWO shares traded higher by 4.76% at $150.79 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.