Stephens, Cowen up Take-Two price targets ahead of Q1 results
Take-Two (TTWO) shares edged higher after two analysts raised their price targets on the stock, with both describing upbeat expectations for the upcoming title "Borderlands 3." Both notes come before the game maker's first quarter earnings results, which are set to be announced after the market close on August 5. STEPHENS UPS PRICE TARGET TO $140: In a research note to investors, Stephens analyst Jeff Cohen maintained an Overweight rating on Take-Two and raised his price target on the shares to $140 from $120. The analyst said his firm was unveiling its initial FY21 bookings and adjusted earnings per share estimates of $2.74B and $5.02, compared to consensus estimates of $2.72B and $4.68, respectively, noting that the firm does not have much visibility into the company's fiscal 2021 slate. Cohen said he is not anticipating a Rockstar title and is just modeling one unannounced AAA title from the game maker's 2K label. The analyst, noted, however, that "Borderlands" had a "very strong showing" at E3 and that he believes player engagement with "Borderlands 2" on Steam is a strong indicator of demand for the upcoming "Borderlands 3." Cohen believes buy side expectations for year one sales of "Borderlands 3" have crept up since E3, adding that the most bullish investors he has spoken to are now expecting about 12M-15M units sold. The analyst also said that Take-Two cutting the price of the most recent "NBA 2K" title to $3 during the month of June brought a lot of new players into the funnel which, coupled with an eventful NBA off-season, should be positive for sales of "NBA 2K20." COWEN UPS PRICE TARGET TO $126: Additionally, Cowen analyst Doug Creutz raised his price target for Take-Two to $126 from $113, saying "everything looks very positive" for the upcoming "Borderlands 3," which launches on September 13. Creutz said his firm currently has 9M unit sales of the game modeled for the fiscal year, but is feeling "increasingly good" about a result of over 10M units. Each additional 1M units is worth near 20.c per share in EPS, so at 12M-13M units, the analyst believes the company could do north of $5.00 EPS for the fiscal year, assuming "everything else is on track." Creutz maintained an Outperform rating on the stock. PRICE ACTION: In afternoon trading, shares of Take-Two are up about 0.8% to $118.13.