Take-Two Shares Bounce Back, Analysts Lower Price Targets

Take-Two Interactive Software, Inc TTWO, the company behind the popular Old West game "Red Dead Redemption 2," isn’t likely to ride off into the sunset, notwithstanding weakened guidance, according to sell-side analysts. 

Take-Two shares bounced back somewhat Thursday after being chased out of town earlier in the week when the company provided a weaker-than-expected outlook. The stock fell about 14 percent after its revenue report, but was up 4.17 percent at the close Thursday. 

The Analysts

Morgan Stanley’s Brian Nowak maintained an Overweight rating on Take-Two and lowered the price target from $140 to $130. 

Credit Suisse analyst Stephen Ju maintained a Neutral rating on the stock, lowering the price target from $126 to $112.

Morgan Stanley

Nowak’s belief in "Red Dead Redemption 2," which has sold 23 million units, hasn't been dampened.

The company has built and monetized digital game ecosystems before, the analyst said, citing the "Grand Theft Auto" franchise.

“We believe TTWO is well-positioned to continue seeing strong growth given 1) best in class content and 2) a large, engaged and relatively under-monetized player base." 

Credit Suisse

Ju also lowered expectations based on the weakness in Take-Two's guidance this week, but found a bright side in above-expected performance by the "NBA2K" game.

Price Action

Take-Two shares were up 4.17 percent at $96.39 at the close Thursday. 

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"Red Dead" screenshot courtesy of Take-Two.