Take-Two Interactive Software (TTWO) released its fiscal 2019 third-quarter earnings results on February 6. It reported net revenues of $1.25 billion, compared to $481 million in the corresponding quarter of the previous fiscal year. Its earnings per share also rose from $0.21 to $1.57 over the period. The company’s revenue fell short of analysts’ estimates. TTWO saw negative price action of 13.7% after its earnings release. Electronic Arts (EA) also fell sharply after its revenue miss, but the stock has recouped those losses and is up handsomely year-to-date after its Apex Legends game received a phenomenal response.
Several analysts lowered their TTWO target prices after the company’s earnings release. On February 7, Baird lowered its target price from $145 to $114 while maintaining its “outperform” rating. On the same day, Barclays also lowered its price from $144 to $114 while Morgan Stanley lowered its from $140 to $130. Credit Suisse, MKM Partners, Bernstein, and Benchmark lowered their target prices as well.
On February 8, Cowen and Company lowered its target price from $108 to $103. On February 12, BMO downgraded TTWO to “underperform” from “market perform” and lowered the stock’s target price from $119 to $80.
TTWO has received a “buy” or higher rating from 22 analysts while three analysts have given it a “hold” rating. The remaining analyst polled by Thomson Reuters on February 19 rated TTWO a “sell” or equivalent. The stock’s mean consensus price target of $122.96 represents a potential upside of 31.8% over its February 19 closing price.
In the next and final part of this series, we’ll see how analysts view Activision Blizzard (ATVI).