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Investing.com -- Rothschild & Co Redburn said in a note Wednesday that consensus sales forecasts for Grand Theft Auto VI (GTA VI) remain “too conservative,” particularly for the PC market, just nine months before release.
The firm noted that consensus unit sales expectations are only marginally above GTA V levels, which it believes underestimates the opportunity given “a larger base of eligible consoles,” the likelihood that “former fans will return to the game,” “unprecedented consumer interest with the latest trailer hitting 475 million views within just 24 hours,” and “a much larger PC gaming market which should materially benefit GTA VI.”
While consensus now assumes an $80 price tag, up from $70 for most AAA games, Rothschild & Co Redburn said “$80 seems very appropriate” given the title’s scope and expected demand.
“Our confidence would be higher if it had been more widely adopted by other AAA games,” analysts wrote.
The firm also stated that consensus amortization projections are too high in FY27 and too low in FY28 and FY29, implying potential upside to near-term profit forecasts.
It expects a significant contribution from a new GTA VI Online and highlighted that about $700 million of capitalised costs relate to non-GTA projects, “underlining the breadth and strength of the company’s pipeline.”
Rothschild & Co Redburn cited past examples where “companies with upcoming transformational content tend to perform well ahead of release,” including CD Projekt RED before Cyberpunk 2077.
The firm raised its price target for TTWO from $227 to $260, rolling forward to 26x CY27 earnings. It forecasts FY27 and FY28 earnings per share 6% and 18% above consensus, respectively.