Analysts at BTIG on Wednesday initiated coverage on video game publishers Take-Two Interactive Software Inc. (TTWO) and Activision Blizzard Inc. (ATVI) with buy ratings, and on Electronic Arts Inc. (EA) with a neutral rating. The BTIG analysts, led by Brandon Ross, wrote in a note to investors that they believe there is still significant upside for video game publishers, even with the multi-year run stocks have enjoyed as profits have climbed higher and multiples have expanded. "Activision, Take-Two and EA have all seen significant gains over the past four years. As we began to research the space, our knee-jerk reaction was 'we missed it' and we wished we had covered these names earlier," Ross wrote. "The transformation of games from standalone packaged media to connected entertainment services is not a finite tailwind for publishers. As players engage with games, publishers are better able to monetize and continuously create richer and more valuable experiences for consumers, leading to further engagement and profits." The reason for EA's neutral rating is analysts have concerns about the company's ability to execute on the industry trends. Shares of Take-Two have gained close to 132% in the trailing 12-month period, while shares of Activision have gained 78% and EA shares have gained 39%. By comparison, the S&P 500 index is up 20% and the Dow Jones Industrial Average is up 25%.
-Trey Williams; 415-439-6400; AskNewswires@dowjones.com
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