BMO Capital Markets analyst Gerrick Johnson ended his bearish call on Take-Two Interactive Software Inc.
TTWO, +2.87%
shares on Tuesday, upgrading the stock to market perform from underperform based on an economic arguments. “As investors grow more fearful of an economic downturn, we think valuation multiples of video game companies could expand, as the video game industry is quite defensive,” Johnson said. “Interactive entertainment is one of the most inexpensive forms of entertainment as measured by cost divided by time consumed.” He expects that if an economic downturn were to occur, consumers who lose their jobs or who are worried about losing their jobs might choose to play more videogames rather than spend money on costlier forms of education. Take-Two shares have risen 2.9% so far this year, as Electronic Arts Inc.
EA, +3.09%
shares have risen 16% and Activision Blizzard Inc.
ATVI, +2.90%
shares have lost 9%. The S&P 500
SPX, +2.14%
is up 9.5% since the start of the year.
