Take-Two Interactive Software stock experienced a decline on Thursday following concerns raised by a BofA Securities analyst regarding the anticipated release of the highly anticipated Grand Theft Auto videogame.
Analyst’s Downgrade
Omar Dessouky, an analyst at BofA Securities, downgraded Take-Two’s shares from Buy to Neutral while maintaining a price target of $170 for the stock. This downgrade came in response to the software developer’s recent announcement stating that the popular videogame would be released sometime in 2025.
Impact of Potential Delay
Dessouky expressed his apprehension about a potential delay in the launch of the game, which could have a negative impact on the stock’s performance in the immediate future. Although the release of GTA VI is expected to drive significant earnings growth and cash flow generation for several years, any postponement may disrupt this positive trend.
Additionally, the analyst highlighted that Rockstar Games, the subsidiary of Take-Two responsible for creating the iconic Grand Theft Auto franchise, has a history of delaying their launch dates. For instance, Red Dead Redemption 2 was initially slated for release in October 2017 but was pushed back and eventually launched a year later.
Take-Two’s Response
Take-Two has not provided an immediate response to the request for comment regarding these concerns.
Stock Performance
Shares of Take-Two experienced a 2% drop on Thursday, reaching $154.25. However, it is worth noting that the stock has still showcased significant growth, with a 48% increase since the beginning of this year.
Grand Theft Auto VI Release Date Excites Investors
Investors are eagerly anticipating the release of Grand Theft Auto VI, as it carries the potential for significant growth in the coming years. The recent announcement of the release date has sparked both excitement and cautious optimism among market analysts.
Market Reaction
Following the company’s disclosure of the release date after Monday’s market close, the stock experienced a slight decline of 0.5% on Tuesday. However, experts remain optimistic about the game’s potential impact on Take-Two’s stock performance.
Deutsche Bank analyst Benjamin Soff, who rates the stock as a Buy with a price target of $175, expressed his positive outlook on the release details. Soff expects Grand Theft Auto VI to hit the shelves around March 2025, assuming there are no unforeseen delays.
A Transformative Growth Opportunity
Soff believes that Grand Theft Auto VI has the potential to be a game-changer for Take-Two. He cites a statement from the press release, which describes the title as “the biggest, most immersive evolution of the Grand Theft Auto series yet.” This, in his opinion, positions the game as a significant and transformative multi-year growth opportunity for the company.
Optimistic View
Raymond James analyst Andrew Marok shares a similarly optimistic perspective on the game’s release. He acknowledges that investors may experience slight disappointment due to the lack of precise timing revealed in the announcement. Nevertheless, Marok maintains his positive thesis on the anticipated scale of the release. He emphasizes that once Grand Theft Auto VI hits the shelves, it has the potential to make a massive impact. Marok rates the stock as Outperform with a price target of $170.
In conclusion, the release of Grand Theft Auto VI garners considerable attention from both gaming enthusiasts and investors alike. The highly anticipated game represents a significant growth opportunity for Take-Two, as market experts anticipate its transformative impact on the gaming industry.