UBS Likes Take-Two's Proven Track Record In Video Game Space

"Grand Theft Auto" publisher Take-Two Interactive Software TTWO has a "grand" content track record making the company set to take advantage of tailwinds in the gaming industry in the coming years, UBS said Wednesday.

The Analyst

UBS analyst Eric Sheridan started coverage of the gaming company with a Buy rating and a $140 price target.

The Thesis

Sheridan expects Take-Two, which is also the company behind "NBA 2K" and "Red Dead Redemption," to see mid-single digit year-over-year bookings growth through 2024 in a total potential market of about $200 billion. UBS sees "long-tailed revenue opportunities" in cloud gaming, esports, the growth of free-to-play games, and the subscription model, with expectations of further boosts from industry consolidation and Asia expansion.

“Take-Two presents investors with a few key elements of long term success in the interactive entertainment sector," Sheridan wrote in note. "A management team with a proven track record of fostering and launching engaging content, disciplined and positive track record of capital allocation and success in identifying key industry trends in terms of both sustaining engagement and monetization with key titles over extended periods."

Price Action

Take-Two's stock traded higher by 1.5% to $120.76 per share at time of publication.

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