Analysts Positive on Take-Two After Earnings, but Shares Fall

Several analysts increased their price targets for the video game maker.
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Shares of Take-Two Interactive Software  (TTWO) - Get Report fell Tuesday morning on profit-taking, as analysts issued generally positive commentaries for the video game maker after it released a strong earnings report.

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The New York-based company reported revenue of $860.9 million on GAAP earnings of $1.57 per share for the quarter ended Dec. 31. Analysts were expecting the company to report revenue of $757 million and GAAP earnings of $1.12 per share.

Take-Two recently traded at $198.90, down 6.77%, but has gained 81% over the past 12 months amid strong demand for video games.

Several analysts increased their price targets for the company. That includes Alexia Quadrani of J.P. Morgan who lifted her target to $215 from $210, maintaining a neutral rating. To be sure, though, Quadrani wasn’t particularly enthusiastic about the near-term outlook for the company.

“Given tough comps ahead, we believe there is limited room for further multiple expansion from here,” Quadrani wrote. “Therefore, while we are encouraged by these results and healthy momentum in the business, we remain Neutral on TTWO shares as we see modest near-term upside from current levels.”

Morgan Stanley analyst Brian Nowak also has a $215 price target, but he has an overweight rating. Take-Two’s results and earnings-guidance increase “highlight continued strong gaming trends, as NBA 2K and GTA [Grand Theft Auto] drive EPS,” he wrote. “We remain positive given the earnings power into 2021.”

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