On Tuesday, Deutsche Bank (ETR:DBKGn) reiterated its Buy rating on Take-Two (NASDAQ:TTWO) Interactive (NASDAQ: TTWO) with a steadfast price target of $190.00. The firm's confidence in the video game company follows Take-Two's recent first-quarter fiscal year 2025 results, which were released on August 8, 2024, and an update on the company's full-year outlook.
The results showed that bookings were down 0.8% while adjusted operating income (OI) increased by 0.9% compared to Deutsche Bank's estimates. Its performance has been bolstered by its acquisition of Gearbox in June, which has led to revised forecasts for the company.
Deutsche Bank now predicts an uptick in full-game sales and profitability over the coming years, driven by new releases from Gearbox and a stronger contribution from the Borderlands and Tiny Tina's Wonderlands franchises, now developed in-house. Additionally, the bank has raised its forecasts for Take-Two's mobile segment by 0.4% annually.
The acquisition of Gearbox is also expected to enhance Take-Two's multi-year adjusted operating income, with forecasts increasing by 1.1-1.3%. However, the adjusted earnings per share (EPS) estimates remain unchanged due to a higher share count resulting from the use of equity to fund the Gearbox purchase.
Deutsche Bank's $190 price target suggests a 27% upside potential for Take-Two shares. This target is based on multiples of 29.1x and 21.5x of the firm's adjusted EPS estimates for fiscal years 2026 and 2027, respectively.
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