Analysts Move In on Recovering Video Game Stocks TTWO and EA

BMO's new price target on TTWO is still below current trading levels

by Josh Selway

Published on May 17, 2019 at 10:12 AM
Updated on Jun 24, 2020 at 10:16 AM

The shares of video game stocks Take-Two Interactive Software, Inc. (NASDAQ:TTWO) and Electronic Arts Inc. (NASDAQ:EA) have been unspectacular in recent months. However, both received upbeat analyst attention this morning, which we'll dig into below.

TTWO's analyst note is less ambitious than the one on EA, with BMO upping its price target to $95 from $80. This is well below the stock's current price of $106.04, and the average 12-month price target of $121.20. Even though the "Grand Theft Auto" parent is negative on a one-year timeline, 17 of the 18 covering analysts recommend buying the stock.

For perspective options traders, volatility expectations are low at the moment, since Take-Two just reported earnings last week. Specifically, the Schaeffer's Volatility Index (SVI) of 32% ranks in the low 9th annual percentile, suggesting it's a good time to pick up premium on near-term contracts.

Turning to Electronic Arts, Wedbush added the stock to its "Best Ideas" list, citing a number of upcoming catalysts, including potential game releases at E3 next month. The brokerage firm has an "outperform" rating on the equity, along with a $122 price target. EA shares were last seen trading down 1.6% at $97.39, right under their 200-day moving average.

Most analysts have kept the faith in the security, with 17 of 25 handing out "buy" or "strong buy" recommendations. The consensus 12-month price target of this group is $110.85. As for options data, EA's Schaeffer's Volatility Scorecard (SVS) of 95 stands out, showing a strong tendency to make bigger moves than the options market was pricing in during the past year.

 


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