Brean Capital Raises Take-Two Interactive Price Target Following Strong F3Q15 Results


Brean Capital analyst Todd Mitchell weighed in today with a few insights on Take-Two Interactive (NASDAQ:TTWO), as the company reported fiscal fourth-quarter results, posting net revenue of $954 million and non-GAAP EPS of $1.87. The analyst reiterated a Buy rating and raised the price target to $35 (from $33) on the stock.

Mitchell noted, “Take-Two substantially beat its F3Q15 outlook, which was expected albeit to a lesser degree. Upside to guidance was driven by sales of just under 10 million units of GTA V on next-gen, 5+ million units of NBA2K15 and solid y/y digital growth. Management now looks for F2015 revenue of $1.65-to-$1.7 billion and non-GAAP EPS of $1.65-to-$1.75, up from its prior forecast for $1.4-to-$1.5 billion and $0.80-to-$1.05. We have raised our own outlook and remain ahead of guidance as well as consensus going into the print of $1.51 billion and $1.36.”

However, “Given the reluctance to provide any materially incremental visibility into F2016 and beyond, as well as our low expectations from the currently announced slate, we are not inclined to raise our terminal multiple. We are increasing our target price for shares of TTWO, but this is largely due to the large cash dividend to TakeTwo from higher-than-expected revenue in F2015. We are maintaining our Buy rating but would not be chasing the stock without further evidence of an expanded F2015/F2016 line-up.”

Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment for consumers worldwide.