By Sam Boughedda
A Deutsche Bank analyst downgraded shares of Take-Two Interactive Software (NASDAQ:TTWO) to Downgrade to Hold from Buy, reducing the price target to $160 from $200 per share in a research note.
The analyst downgraded the stock based on its balanced near-term outlook and the fact it doesn't have a material catalyst.
"Following Take-Two's F1Q23 earnings report and guidance update we are downgrading the stock to Hold (from Buy) based on what we see as a balanced risk/reward outlook this year (due in part to a weakening macro backdrop) and a lack of material near-term catalysts over the next few quarters, though we remain constructive on the company's long-term growth outlook," wrote the analyst.
Deutsche Bank reduced its estimates for net bookings by 10% and for adjusted EPS by 20% in FY24 and FY25, compared to its previous pro forma model. The change to their forecast follows the company's updated guidance.
"We think the company's catalyst path over the next several quarters will be relatively light, though we remain bullish on TTWO's long-term outlook. Following Take-Two's updated FY23 guidance, we now believe that the company's significant content pipeline won't begin to contribute materially until next year. TTWO's prior FY23 guidance (provided in May) called for a ~32% step up in bookings from full game sales this year, as the company targeted a higher cadence of new content releases," added the analyst.
Take-Two shares are down 3% Wednesday.