Take-Two Interactive Software Inc (NASDAQ:TTWO)<\/a> has been named by UBS analysts as their top pick in the US interactive gaming sector, pointing to what it sees as improving visibility around key franchise releases and long-term monetization trends.<\/p>\nThe firm has a \u2018Buy\u2019 rating and a 12-month price target of US$330, implying upside of about 35% from current levels.<\/p>\n
UBS said recent sector weakness has been driven in part by concerns over artificial intelligence increasing competition for user engagement, but argued these fears are \u201coverdone\u201d in the case of Take-Two.<\/p>\n
The analysts highlighted expectations around upcoming Grand Theft Auto VI-related updates, noting that \u201cnew GTA VI announcements, trailers and gameplay\u201d are likely to support sentiment, while broader industry consolidation may reinforce Take-Two\u2019s position as one of the remaining large independent US AAA developers.<\/p>\n
The investment case is anchored in UBS\u2019s HOLT framework, which evaluates long-term economic returns. The bank wrote that it is \u201cbuilding on our conviction that a strong GTA VI launch in the near term, coupled with expanding RCS and in-game monetization, will likely drive more stable long-term economic returns.\u201d<\/p>\n
UBS also pointed to Take-Two\u2019s transition toward recurring consumer spending models. \u201cIn the mid-2010s with the launch and scaling of GTA Online and NBA 2K RCS, TTWO successfully evolved its CFROI (Cash Flow Return on Investment) profile from extreme volatility to high and stable economic returns,\u201d the firm wrote. It added that this historical execution supports expectations for continued growth in recurring consumer spending revenues and further CFROI expansion.<\/p>\n
On the upcoming Grand Theft Auto VI release, UBS said its framework suggests the title could represent a significant earnings catalyst. \u201cWe believe the launch of GTA VI will push CFROI to one of the highest levels we\u2019ve seen compared to historical game launches,\u201d the analysts wrote, comparing expected returns to prior major industry releases.<\/p>\n
The bank also said current market expectations appear conservative relative to its forecast. \u201cIn HOLT\u2019s default valuation framework, TTWO has around 80% potential upside and market expectations appear muted vs forecasts,\u201d UBS wrote, adding that long-term assumptions embedded in the share price imply CFROI will decline toward 9%, below the company\u2019s historical median of 13%.<\/p>\n
UBS expects attention to shift toward Take-Two\u2019s fiscal 2027 outlook when the company reports results on May 21. The analysts expect Q4 results to come in at the high-end of guidance, but noted that the primary focus will be initial fiscal 2027 guidance tied to GTA VI\u2019s release cycle.<\/p>\n
They also referenced historical precedent around major franchise launches, stating that prior releases such as Grand Theft Auto V and Red Dead Redemption II saw \u201cbeat and raise\u201d outcomes after initial conservative guidance.<\/p>\n
UBS expects similar dynamics this cycle, projecting $9 billion in fiscal 2027 bookings, including about $2 billion from full-game GTA VI sales, though it noted estimates could vary depending on pricing, demand and monetization assumptions.<\/p>\n","protected":false},"excerpt":{"rendered":"Take-Two Interactive named top US gaming pick by UBS on GTA VI optimism Proactive uses images sourced from…\n","protected":false},"author":2,"featured_media":63993,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[129],"tags":[34953,34954,34951,34950,34952,34955,34949,223],"class_list":{"0":"post-63992","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ubs","8":"tag-cfroi","9":"tag-economic-returns","10":"tag-grand-theft-auto","11":"tag-gta-vi","12":"tag-industry-consolidation","13":"tag-monetization","14":"tag-take-two-interactive","15":"tag-ubs"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116561153058354313","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/63992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=63992"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/63992\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/63993"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=63992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=63992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=63992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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Take-Two Interactive named top US gaming pick by UBS on GTA VI optimism Proactive uses images sourced from Shutterstock <\/p>\n