Gamers took the latest delay to the long-awaited Grand Theft Auto VI hard, but stock analysts are undaunted, with the vast majority recommending investors stick with Take-Two Interactive Software Inc.
Shares plunged as much as 10% on Friday, on track for the worst one-day decline in three years, after the video-game developer once again pushed back the release of the next entry in the Grand Theft Auto franchise. The setback, for what will likely be one of the industry’s top-selling titles, overshadowed a second-quarter earnings beat and annual guidance raise.
Fans got their first glimpse of Grand Theft Auto VI last December when the trailer was released. Take-Two initially pegged the title for a 2025 release, before pushing that back to May 2026 earlier this year. Now, gamers will have to wait until November 2026 to cause havoc in Vice City, a fictional version of Miami, Florida.
The title is critical for Take-Two, postponing the release means costs to complete the game will continue to mount while revenue from a likely blockbuster gets pushed further out of reach.
“Take-Two must get this game right; large bugs or imperfections could cause a dip in initial sales and long-term ill will,” according to Alicia Reese at Wedbush, one of Wall Street’s biggest bulls on the stock. Yet, like many analyst covering Take Two, she sees little impact to the investment case.
Reese raised her 12-month price target on the stock by $10 to $300, adding “we expect shares to rebound ultimately.”
Raymond James’ Andrew Marok, also raised his price target, expressing confidence in the Rockstar Games unit’s track record, while brushing off concerns over the additional delay.
“We would be buyers on weakness following the print as the thesis into the GTA VI launch remains intact despite a longer wait,” Marok said, setting his target at $275.
Of the 34 analysts tracked by Bloomberg that cover Take Two, only two rate the stock a hold while one rates it a sell. The others recommend buying the stock, like JPMorgan Chase & Co.’s Cory Carpenter.
“The rest of the Take-Two portfolio continues to perform exceptionally well,” Carpenter wrote in a note on Thursday. He views the delay as “a good opportunity for investors to get in ahead of the eventual title release.”
Shares have advanced 27% so far this year. Price targets suggest the stock could climb another 18% or so over the next 12 months.
“The new timing removes the game from a typical seasonal trough for engagement during the summer months and places it closer to the holiday season in the winter months,” said Bloomberg Intelligence’s Nathan Naidu, who estimates GTA VI will generate $2 billion in revenue in the first year.
MoffettNathanson sees Take-Two benefiting from being the “last man standing” in pure-play video game publishers as peer Electronic Arts Inc. is poised to leave the stock market following the largest leveraged buyout on record.
The selloff however, illustrates the difficulties of navigating public markets as a video-game publisher. It also brings to mind other disappointments like the release of the much anticipated Cyberpunk 2077 from CD Projekt SA, which saw shares tumble after the release in 2020.
The Grand Theft Auto VI delay is “not really” a problem to Clay Griffin, who has a rare hold-equivalent rating on the stock. But the gap between the game and its predecessor, as well as the increasing development costs are a concern.
“It depends on how much more GTA VI can return through the cycle,” wrote MoffettNathanson’s Griffin. He estimates GTA V contributed about $10 billion of bookings cumulatively since its initial 2013 release. “It’s obviously a very healthy IRR, but we intuit that 13 years is…well, not ideal.”
With assistance from Subrat Patnaik.
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