Here's Why JPMorgan Upgraded Rating On Take-Two Interactive Software

JPMorgan analyst David Karnovsky upgraded Take-Two Interactive Software, Inc TTWO to Overweight from Neutral with a price target of $175, down from $205, following a period of restriction.
With the close of the Zynga acquisition, Take-Two now offers a scaled portfolio of mobile games, apart from leading PC/console intellectual property and a pipeline of content set to "ramp significantly," Karnovsky noted.
Karnovsky observed that the shares were down 20% since the deal's announcement on January 10, reflecting investor concerns over pandemic comps and platform privacy changes.
Karnovsky expects the headwinds to ease in the coming quarters and further see the post-IDFA landscape favoring scaled operators.
On the PC/console side, following a period of investment, Take-Two is set to substantially increase its output of AAA games, which Karnovsky forecasts will drive a step-function increase in revenue and profitability.
Price Action: TTWO shares traded higher by 0.51% at $132.07 on the last check Thursday.
Photo via Wikimedia Commons