Zillow gains on upgrade, Take-Two started at Outperform: 4 big analyst picks
Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed today: an Outperform initiation at Take-Two Interactive Software, and upgrades at Zillow, BlackRock, and Eagle Materials.
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Zillow gains on JMP Securities upgrade
Zillow Group (NASDAQ:ZG) shares rose more than 2% pre-market today after JMP Securities upgraded the company to Market Outperform from Market Perform with a price target of $60.00.
The upgrade is based on a belief that the current market consensus underestimates Zillow's potential for 2025 and 2026. This view is supported by expectations of increased demand and a forecasted decrease in interest rates in the latter half of 2024. The analysts revised upwards both the revenue and profit forecasts for Zillow, taking into account the company's expected modest market share gains and a stabilization in home sales. Additionally, JMP Securities sees further growth potential for Zillow as it scales its newer solutions.
While the NAR antitrust lawsuit headlines are likely to create near-term stock price volatility, we view ZG as well positioned to navigate a variety of outcomes given its ubiquitous position within the vertical.
Take-Two Interactive started with Outperform at Wolfe Research
Wolfe Research initiated coverage on Take-Two Interactive Software (NASDAQ:TTWO) with an Outperform rating and a price target of $186.00, as reported in real-time on InvestingPro.
The analysts highlighted the significance of Take-Two's diverse game portfolio beyond its flagship Grand Theft Auto (GTA) series. They noted that following the release of GTA V in 2013, there was a temporary dip in non-GTA related revenue, but other non-mobile net revenue rebounded strongly in subsequent years, driven by titles like Civilization VI and Mafia III.
Such speaks to the cohesive strategy implemented at TakeTwo: while Rockstar releases the sporadic, “decade / half-decade defining” game that provides material spikes in revenue, the matrix approach of games across 2K studios (& Private Division) ensures continuity to the topline growth.
Two more upgrades
Exane BNP Paribas upgraded BlackRock (NYSE:BLK) to Outperform from Neutral with a price target of $885.00.
JPMorgan upgraded Eagle Materials (NYSE:EXP) to Neutral from Underweight with a price target of $200.
JPMorgan left the 2023 estimated EBITDA growth at 14% year-over-year, amounting to $844 million. The analysts anticipate margins to reach 35.8%, a 2.2 percentage point increase, on a 7% growth in revenue.
For next year, we are slightly increasing our expectations despite lower expectations for revenues, as we now see EBITDA +9% y/y and margins at 36.9% (+0.9pp vs. prior).
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