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Take-Two Interactive Software, Inc. (NASDAQ:TTWO) Incites Mixed Analyst Response

Posted by Todor Pichurov, Jan 31, 2013 10:23

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has two major releases just around the corner. 'Grand Theft Auto 5' and 'Bioshock Infinite' are expected to launch in late March. GTA 5's release date was reportedly leaked to be March 24, according to Microsoft Xbox preorders. Different analysts approached TTWO's coming months in different ways.

MKM Partners has rated TTWO stock as a 'Buy', and one with a target price nearly two dollars above the current $12.45 per share as of the time of writing. Analyst Eric Handler expects the upcoming releases to show TTWO's true strength and sustain the momentum the stock has been gaining since its drop in the end of 2012. Handler said that digital distribution revenue as well as the recent acquisition of dissolved THQ assets could also play a role in pushing the performance envelope of TTWO.

On the other hand, analysts with Brean Capital restated their 'Hold' rating on TTWO stock. Brean Capital still sees Grand Theft Auto 5 as the obvious next big thing for the company but also sees inconsistency in Take-Two's business performance, citing TTWO's releases of 'Spec Ops: The Line' and the latest 'Max Payne' title, which didn't meet retail expectations despite the positive critical reception. Brean's prescription for TTWO on a year with no GTA title in it seems to be a solid retail product, with Borderlands 2 given as an example, followed by 'high-margin digital add-on content' as the analysts call it - something that may be known to gamers as 'DLC bundles that cost more than the base game'.

TTWO shares have gone up over a dollar in January after the year-end dip.

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