Take-Two Interactive Software's Price Target Slashed By 24% Ahead Of Q1 Results; Analyst Reiterates Neutral Rating

Credit Suisse analyst Stephen Ju maintained Take-Two Interactive Software, Inc TTWO with a Neutral and cut the price target from $182 to $139.
The PT cut reflected the Zynga acquisition and EPS revision after factoring in the FX changes for the Grand Theft Auto Maker.
His FY23/FY24 adjusted EPS estimate was now at $6.73/$10.90 vs. $4.61/$10.74.
Ju opted for Rockstar and 2K over Zynga brands following the final terms of the Zynga transaction.
As the ~$116 volume-weighted average TTWO share price fell below the collar range of $156.50-$181.88, the final terms of the transaction imply a ~$8.20/share price suggesting a ~14.6x CY22 EBITDA multiple on consensus estimates as of May 2022.
He believed Take-Two would elect to use development talent toward bringing what should be updated mobile versions of Grand Theft Auto, Red Dead, NBA, and other potential Rockstar and 2K brands instead the legacy Zynga properties.
The company will report its Q1FY23 results on August 8.
Price Action: TTWO shares traded lower by 0.65% at $130.25 on the last check Wednesday.

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