Take-Two Beats Q4 Estimates, Pushes Back 2K Game: Analysts Weigh In

Take-Two Interactive Software, Inc TTWO announced its fourth-quarter earnings after the close Wednesday. EPS and sales both beat consensus estimates, though the initial guidance for fiscal 2019 fell short.

Here’s a rundown of what several Wall Street Analysts had to say after the print. 

The Street Weighs In

With the competitive impact from battle royale-style games already priced in, what investors were watching for was potential changes to Take-Two's 2019 release slate, Credit Suisse's Stephen Ju said in a note. 

Take-Two announced that a 2K game, anticipated by many to be “Borderlands 3,” will be delayed until fiscal 2020. The news weighed down on analyst estimates for the coming year.

Reflecting the move, Take-Two announced fiscal 2019 net bookings guidance of $2.67-$2.77 billion against a consensus estimate of $2.87 billion. That said, the move also supports a longer-term growth thesis through 2020.

Besides “Borderlands,” Wedbush’s Michael Pachter said he expects the launch of several new games over the next two years —including a new “Bioshock” installment, “Red Dead Redemption 2” and new Rockstar titles — that will drive EPS growth by 10 percent or more.

Other highlights picked out by Baird analyst Colin Sebastian are the recent launch of the 2K eSports league and meaningful contributions from the Social Point acquistion, both of which present as significant new growth drivers.

Despite mixed price target revisions, Wall Street’s outlook on the company is generally positive, with a strong focus on 2020.

The Ratings

• Baird reiterated an Outperform rating and $137 price target.
• Credit Suisse reiterated a Neutral rating and cut its price target from $128 to $123.
• Wedbush reiterated an Outperform rating and raised its price target from $126 to $132.

At time of publishing, shares of Take-Two were trading 1.2 percent higher at $114.39. 

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