Take-Two Interactive Software (TTWO) reported robust fiscal Q4 financial results, buoyed by the continued popularity of "GTA Online," the performance of its mobile gaming division Zynga, and the standout success of its "NBA 2K" franchise, Morgan Stanley said in a report Monday.

Q4 bookings and earnings per share each topped expectations by 3%, with recurrent consumer spending rising 14% year over year. NBA 2K was a standout, delivering 42% RCS growth, supported by strong engagement and recent gameplay innovations, while Zynga also exceeded forecasts, helped by the breakout success of Color Block Jam, which reached the top 10 most downloaded games on the US iOS App Store, the report said.

However, the launch of "Civilization VII" in February was identified as a potential weak spot. "[W]e believe the February launch of Civilization VII underperformed the company's targets, leading to the more modest F4Q beat vs. our expectations," Morgan Stanley said.

The investment bank remains optimistic about Take-Two's long-term prospects, citing the anticipated spring 2026 release of GTA VI, alongside continued momentum in NBA 2K, expected high single-digit RCS growth, and the upcoming Borderlands 4 release in September to help offset the earnings gap from the GTA VI delay.

Despite the near-term earnings adjustment due to the "GTA VI" delay, Morgan Stanley reiterated an overweight rating and raised its price target to $265 from $210.

Price: 233.56, Change: +6.82, Percent Change: +3.01