Take-Two Interactive upgraded to Buy at Citi

Citi analyst Jason Bazinet upgraded shares of Take-Two Interactive (TTWO) to Buy from Neutral. Bazinet also raised his price target on the stock to $200 from $170. In his note, Bazinet makes the case for a 4:1 risk/reward ratio, which, by his estimates, makes the stock "compelling" at current levels.

Yahoo Finance's Myles Udland and Julie Hyman discuss the note in the video above.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

Editor's note: This article was written by Stephanie Mikulich.

Video transcript

- The Take-two interactive up about 1.5% today. That follows an upgrade from analysts over at Citi. Jason Bazinet raising his price target on the stock to $200 per share. Writing that risks around the timing of its upcoming grand theft auto six game are manageable. The company last month also acquired gearbox entertainment. A deal that takes some of the pressure off its GTA, 2K and Red Dead Redemption. Franchises, I was looking at the stock here, Julie as we were looking at this note and thinking about the state of the video game business overall.

And I think when you look at the last five years of Take-two and you look at just where the industry sits in 2024. Where I don't need to tell you how much kids these days are interested in gaming. You do all the math, time on the platform, how involved people are and all this? The thesis for, well, buy it, it's going to go up. It has not worked to the extent that I think maybe the cultural import of video games has perhaps not followed or has outpaced one of the investment returns have been over a long time period now.

JULIE HYMAN: Well, I'm a Fortnite/Roblox/Chess online household right now. So I don't-- we're not doing the Grand Theft Auto thing specifically. But yes, I do understand while the cultural hold that it has. And I mean, and that's what the thesis of this note is. Where he says even if it's late, it's still going to be huge. And we're not worried that it's going to do well.

- Yeah. And I think-- I look at it and one, because I was a core GTA demo. I did not realize that it had been-- was. Well, so was is part of it. Two, I had not realized it had been 12 years since they last or it's going to be 12 years. If this game comes out, the beginning of next year it'll be 12 years since they last released a version of GTA. And it also was like that was a whole different era. That's-- you go to GameStop and you get there. And maybe you trade in something you had and you buy the thing.

And that's like not, yes, obviously you buy the game over Xbox Game Pass or whatever it might be. But that whole model of you need to get the upgraded game and then you need to get the add on pack and you need to buy all the disks. And it's a very different world where everyone wants to go to services, the game pass subscription and it feels anachronistic, I guess. And if you look at no one in four years. So--

JULIE HYMAN: We're waiting for this?

- I think there's some questions whether this can change. I don't know, the fortunes, let's say.

JULIE HYMAN: Well, we'll see.