Game On: Analyst raise price targets on Take-Two after Q2 results

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: Among this week’s most notable new releases is Square Enix’s (SQNXF) “Dragon Quest III HD-2D Remake,” a full remake of the 1988 hit role-playing game. The title launches November 14 for PC, Nintendo Switch (NTDOY), PlayStation 5 (SONY), and Xbox Series X/S (MSFT). Also out this week is Sony’s adventure game “Lego Horizon Adventures,” which comes out for PC, PS5, and Switch on November 14 as well.

TAKE-TWO RESULTS: Last week, Take-Two (TTWO) reported Q2 results, with GAAP earnings per share rising year-over-year and net bookings beating consensus estimates. “I am pleased to report that we delivered strong second quarter results. Our Net Bookings of $1.47B were at the top of our guidance range, driven by the continued success of the Grand Theft Auto and Borderlands franchises, and our operating results surpassed our plans, largely due to a shift in the timing of marketing expenses within the year,” said Strauss Zelnick, Chairman and CEO of Take-Two Interactive. Looking ahead, the company provided earnings and net bookings guidance for Q3 and fiscal 2025.

Following the report, no fewer than nine analysts raised their price targets on Take-Two, with Baird maintaining an Outperform rating and saying there were “no surprises” in the Q2 report. Morgan Stanley also raised the firm’s price target on Take-Two to $200 from $185 with an Overweight rating on the shares, saying Q2 results came in ahead, with bookings 1% above and EPS 49% above the firm’s estimates. In addition, Raymond James said the report was “slightly ahead of the top of the bookings range, and solidly above on EPS,” and showed that “NBA 2K25” got off to a strong start, mobile continued its recent momentum, and “GTA Online” came in ahead on solid summer content releases. Additionally, the intra-quarter announcements of “Borderlands 4” and “Mafia: The Old Country” for FY26 “tick enthusiasm up” going forward into FY26 and anticipated “Grand Theft Auto VI” release, the firm added.

SONY GAMING RESULTS: Also last week, Sony (SONY) reported Q2 results that showed growth on the top and bottom line. Of note, Game & Network Services segment sales for the quarter increased 12% year-on-year to JPY1.71T primarily due to an increase in third-party software sales, despite a decrease in hardware sales. The number of monthly active users across all PlayStation platforms in September increased 8% compared to the same month last year to 116M accounts, marking the eighth consecutive quarter of growth compared to the same period of the previous year, the company said. Total play time also increased 14% compared to the same month last year and 11% on a cumulative basis since the beginning of the current fiscal year compared to the same period of the previous fiscal year, and meanwhile PS Plus is providing a “stable base” of earnings as sales increased 18% year-over-year.

On the software side, third-party software sales significantly grew due to contributions from solid franchise titles as well as hit new IP, including a new sports title and an action RPG title from China. In terms of first-party content, “Astro Bot,” released on September 6, has sold over 1.5M copies in the nine weeks since its release, with 37% of users who purchased the game having not purchased a first-party title from Sony in the last two years.

Looking ahead, Sony raised its overall revenue guidance for fiscal 2024, adding that it expects sales and profits for its gaming segment to decline in the second half of this fiscal year compared to the same period of last fiscal year, when “Marvel’s Spider-Man 2” and “Helldivers 2” were “huge hits.”

Click here to check out recent Media Buzz Sentiment on Sony as measured by TipRanks.

OCTOBER JAPAN SALES: Nintendo’s “Super Mario Party Jamboree” debuted in first place on Japan’s sales charts last month, selling over 227,500 units in the country within its first two weeks of availability, Gamesindustry.biz’s Sophie McEvoy (SGAMY) “Metaphor: ReFantazio,” Nintendo’s “The Legend of Zelda: Echoes of Wisdom,” Bandai Namco’s (NCBDY) “Dragon Ball: Sparking! Zero,” Konami’s (KONMY) “Professional Baseball Spirits 2024-2025,” and Square Enix’s “Romancing SaGa 2: Revenge of the Seven.”

MORE VIDEO GAME NEWS:

• Nintendo president Shuntaro Furukawa confirmed that Nintendo Switch software will also be playable on the successor to the Nintendo Switch
• “Mario & Luigi: Brothership” debuted in third place in U.K. boxed sales in its debut week, Gamesindustry.biz reports
• A TV adaptation of Electronic Arts’ (EA) “Mass Effect” video game series is in the works at Amazon (AMZN), Variety says