Bank of America Merrill Lynch Discusses Take-Two

Bank of America Merrill Lynch is out with a research report on Take-Two Interactive Software, Inc. TTWO, and the gaming sector in particular. In the note, Bank of America Merrill Lynch writes, "US retail sales were down 33% y/y (UK sales were up 3%) despite catalog sales strength and QTD US/UK retail sales at -19% are tracking below our flat F1Q revenue estimate. LA Noire had a decent launch with 900k units sold in the US, but units are down 40% vs. last year's Red Dead (although down just 5% in UK). Early sales of LA Noire are below our forecast (we expected 1.1 – 1.15mn US units in May) and given that Duke Nukem (6/14) has poor reviews we see less F1Q upside potential. With a big FY13 ahead we are staying constructive on Take-Two, although the stock may trade side ways until the NBA 2K launch in the Holiday period. Biggest potential catalysts will be in CY12, with Bioshock and possibly Grand Theft Auto titles coming." Shares of TTWO lost 17 cents yesterday to close at $15.42, a loss of 1.09%.