Leon Neal
Take-Two Interactive Software (NASDAQ:TTWO) rose 2% as an update from Jefferies cemented it as the firm’s top pick in interactive entertainment while also weighing in on Electronic Arts (NASDAQ:EA) and Roblox (NYSE:RBLX).
“The wait is nearly over” on Take-Two’s game slate, led most prominently by Grand Theft Auto VI, the biggest update to the lucrative franchise, analyst James Heaney said: Take-Two has the “most visible path to its many release catalysts, headlined by GTA VI and return to growth in mobile.”
The news around that game will likely drive the stock until it’s released in fall 2025, he said; while there’s still a “long list” of unknowns around the game, “we expect upward estimate revisions and increased confidence as each of those questions get answered.” Meanwhile, other upside catalysts include unlocking the company’s development pipeline over fiscal 2026-27, expanding margins from live services, and “regained momentum” on mobile.
The firm raised its price target on TTWO to $185, implying 22% upside.
Heaney also assumed coverage on Electronic Arts (EA) at Buy, noting the company’s “many shots on goal” when it comes to “unrivaled scale” in sports games.
“The World Cup and name change” — the company’s EA Sports FC soccer franchise took over from the previous FIFA Online games — “re-rated FC expectations, and we expect continued execution and the addition of College Football to sustain [mid-single-digit-plus] growth in sports,” Heaney wrote.
Meanwhile, talk about EA’s own robust pipeline should come back to the forefront in the back half of the year, he said. EA was up 1% late Thursday morning, and Jefferies’ price target of $165 implies 14% upside.
Heaney also assumed coverage of Roblox (RBLX) at Hold noting some “lofty” growth and margin expectations against the company’s already-premium valuation, and is staying on the sidelines with a Hold on Skillz (NYSE:SKLZ), seeing “fundamental limits” to the company’s current model amid declines in paying monthly active users.