Adam Parker says investors should buy Take-Two Interactive Software Inc. (NASDAQ:TTWO) because Trump tariffs and fears about a full-blown war on trade continue to wreck havoc on global equity markets.
He is the founder and CEO of Trivariate Research.
Trump’s trade policy is expected to push the US into a recession by the end of the year. A slowing economy can also affect discretionary spending.
Parker, from Trivariate, believes TTWO will be able to weather the macro-uncertainty that would otherwise make US stocks less attractive in 2025.
GTA VI will drive revenue and free-cash flow growth at TTWO
Adam Parker is bullish about Take-Two’s stock, primarily because it is widely expected that the video game publisher will release the highly anticipated Grand Theft Auto VI by 2025.
GTA has historically been a title which has accelerated revenue growth and free-cash flow for TTWO. Not just for a few months, but instead for several years.
In an interview with CNBC today, the market expert said: “What is eventually coming is the next Grand Theft Auto. And what comes with that are a step-change in revenue growth and a free cash flow with historically very long tail.”
Take-Two’s shares are already bucking the trend, and remain in the black at a time of macro-uncertainty that has US stocks scrambling to gain gains.
Take-Two shares can help you stay resilient in a recession
Parker of Trivariate believes that Take-Two’s shares will remain resilient, even if the tariff situation and the subsequent trade war lead to an economic slowdown by 2025.
Even if the economy is slowing down, the launch GTA VI could help the video game publisher to double its revenue before the end of this decade.
Take-Two Interactive Software’s “risk-reward ratio is skewed in favor of the positive”, he said.
Despite uncertainty over tariffs, the Nasdaq listed firm recently confirmed its guidance of up to $5.67 Billion in revenue for this year. Analysts were at a lower estimate of $5.61 billion.
How high could TTWO share prices soar in 2025
Parker isn’t the only one who maintains a bullish position on Take-Two. The Wall Street consensus remains “overweight” on the video game publisher, reflecting its continued optimism about growth prospects and upcoming games.
Edward Woo, of Ascendiant Capital, currently sees TTWO shares rising by $270. This indicates a potential gain of more than 25% from current levels.
Woo’s recent note to clients also cited GTA VI, the anticipated release of which, as the primary reason, for his positive opinion on the company, which owns Rockstar Games and 2K, Zynga.
Take-Two Interactive Software shares are not attractive to income investors as they do currently not pay a dividend.
This post GTA VI protects Take-Two from tariffs and fears of recession may be modified as new updates unfold.
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