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Shares of Take-Two Interactive Software (NASDAQ:TTWO) were upgraded to Buy from Neutral, with their price target lifted from $131 to $165 by Goldman Sachs.
Analysts there said in a research memo that while the near term remains fluid, the building of long-term industry themes should emerge in 2023/2024.
“TTWO’s content pipeline (with investments building in the past few years) should result in improved revenue growth and expanding margins in the coming years as games are moved from development to launch,” wrote the analysts.
They added that there is an improved mobile gaming landscape for the Zynga acquisition in the coming years.
“In terms of our operating estimates, we slightly raise our FY23 operating estimates (mix of slightly lower mobile gaming bookings & higher recurrent consumer spend in 2H23),” continued the analysts. “Looking to FY24 & beyond, we modestly raise our bookings assumptions as we expect greater sell-through in units (as the installed base grows and as nearly half of the ~93 titles pipeline laid out during Q4 2020 earnings comes to market in FY24 & FY25). In addition, we raise our margin assumptions for FY24 & beyond as we expect to see a greater degree of leverage when key titles (e.g., GTA VI) are released.”
Take-Two shares are up 2.6% at the time of writing on Thursday.
