Jefferies upgrades Take-Two Interactive as video game production ramps up, sees 30% rally
Take-Two Interactive 's ramped-up production pipeline should help its stock surge more than 30%, according to investment firm Jefferies. Last month, the video game publisher released guidance for strong growth in the number of titles to be published in years ahead. The company said it would release four games in its immersive core category over the next year and then 19 in the following two years. Analyst Andrew Uerkwitz upgraded the stock to buy from hold, saying in a note to clients on Thursday that it was hard to grasp how many games Take-Two is developing and that "we are drowning in IP." "Not only can we not get to the Immersive Core titles for the next 3 fiscal years, don't forget [management] two quarters ago gave the number of titles being worked on for the next 5 years at 93. This would indicate FY25 and FY26 will also be very strong IP years and here only the wildest guesses at content could answer what is in the pipeline," the note said. Jefferies raised its price target on Take-Two to $231 per share from $185, which is roughly 31% above where the stock closed on Wednesday, and said that another price target hike could be coming. "As the Street learns more and better models the pipeline, we expect upward earnings revisions and additional upside to our price target," the note said. Shares of Take-Two have struggled this year, falling nearly 15% since the end of December. -CNBC's Michael Bloom contributed to this report.

Strauss Zelnick, CEO of Take Two Interactive. Adam Jeffery | CNBC