Take-Two Interactive tumbles 11% even as BofA upgrades following bookings cut
Erikona

Take-Two Interactive (NASDAQ:TTWO) dropped more than 11% on Tuesday despite an upgrade from Bank of America as the Grand Theft Auto maker cut its bookings outlook for the holiday-quarter and next fiscal-year.
Analyst Omar Dessouky raised the firm's rating on Take-Two Interactive (TTWO) to buy from neutral, but cut the price target to $120 from $130, noting that shares have gone from cheap to "cheap enough" as the stock has declined more than 45% year-to-date.
"At the current price of $94.17, we think TTWO now offers a margin of safety that alleviates the risk of GTA 6 pushout beyond [fiscal 2025] (~$4.00 EPS out of a total $12.00 EPS in FY25)," Dessouky wrote in a note to clients.
The analyst added that at $120, or 15 times the expected $8 per share in earnings, there is enough upside for investors "to ride out the next year, while positioning for multiple expansion driven by de-risking of the PC/Console pipeline, GTA 6 release date, synergies, and mobile stabilization that could emerge in mid â23."
Dessousky also noted that Take-Two Interactive's (TTWO) acquisition of Zynga should contribute roughly $400M in EBIT and $2 per share in fiscal 2025, with both estimates sufficiently de-risked and "consistent with our bearish medium term outlook on mobile games."
Looking to the next quarter, Take-Two (TTWO) expects net bookings to be between $1.41B and $1.46B, compared to consensus forecasts of $1.69B. For its full fiscal year, Take-Two (TTWO) is forecasting bookings of $5.4B to $5.5B, while analysts has previously pegged the company's bookings at $5.89B. 
Separately on Tuesday, Take-Two Interactive (TTWO) CEO Strauss Zelnick said he had no issues with the Microsoft's (MSFT) planned $69B purchase of Activision (ATVI) and that most of his competitors feel the same way.
Analysts are largely positive on Take-Two â(TTWO). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates TTWO a HOLD.