Take-Two Interactive Software
stock was dropping Thursday after a BofA Securities analyst cited uncertainty over launch timing of the new Grand Theft Auto videogame.
BofA Securities analyst Omar Dessouky downgraded shares of Take-Two to Neutral from Buy and maintained his $170 price target on the stock. The downgrade came three days after the software developer announced that Grand Theft Auto VI would be released sometime in 2025, after some speculation that the title could come in 2024.
The analyst said Rockstar Games—which is owned by Take-Two and creates the Grand Theft Auto franchise—has had a history of delaying launch dates. This includes the launch of Red Dead Redemption 2, which was planned for release in October 2017, but ultimately came out a year later, Dessouky said. He fears the coming version of Grand Theft Auto could also suffer a delay. Even if it doesn’t, Take-Two stock is still largely in a sit-and-wait period until the 2025 release, he says.
“While the widely anticipated GTA VI release should support multiple years of above-market earnings growth and cash flow generation, a
potential delay in the game’s launch could keep the stock in holding pattern in the near term,” Dessouky wrote.
Take-Two declined to comment. Shares of Take-Two fell 2.2% Thursday to $153.84. The stock has gained 48% this year.
The release date appears to concern investors as well. The stock fell 0.5% on Tuesday after the company announced the release date after the close Monday.
Deutsche Bank analyst Benjamin Soff seemed a little more positive on the release details. Soff, who rates the stock a Buy with a $175 price target, said in a note Monday he expects the game to be released around March 2025, barring no delays.
“We believe GTA VI represents a transformative multi-year growth
opportunity for Take-Two. According to the press release, the title
represents ‘the biggest, most immersive evolution of the Grand Theft Auto series yet,’” Soff said.
Raymond James analyst Andrew Marok also has a more optimistic view.
“While investors are likely to be mildly disappointed in the precise
timing, and we expect a slight down move in the stock as a result, this does not change our thesis on the anticipated scale of the release when it does hit shelves, which remains potentially massive,” wrote Marok, who rates the stock as Outperform with a $170 price target.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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