Piper Jaffray's Video Games Update

Piper Jaffray published its Video Games, Toys & Specialty Consumer update today.

In a note to clients, Piper Jaffray writes, "Holiday video game sales are up over last year according to 65% of our respondents. Holiday video game sales are up 1% Y/Y on average driven in part by hardware and peripheral sales."

Stocks Piper Jaffray notes in this update are:

Our 12-month price target for Activision Blizzard (NASDAQ: ATVI-Neutral) is $13 (17x CY11E EPS). Risks include dependence on key mgmt, slowing category sales, game delays, insider selling, dynamic retail environment, consumer spending and recession.

Our 12-month price target for Electronic Arts (NASDAQ: ERTS-Neutral) is $16 (~20x FY12E EPS). Risks include uncertain industry trends, high cost structure, short game life cycles, change to consumer preferences, acquisitions, competition & economic risk.

Our 12-month price target for THQ (NASDAQ: THQI-Neutral) is $4 (20x FY12E EPS). Risks include dependence on key management, restructuring, dynamic retail environment, prolonged recession, consumer preferences, pricing, competition, product quality & economic risks.

Our 12-month price target for Take Two (NASDAQ: TTWO-Neutral) is $12 (24x FY10-11E avg EPS). Risks include unpredictable earnings trends, ability to create new IP, dynamic retail environment, changing consumer preferences, competition & macro-economic risk.

Our 12-month price target for GameStop (NYSE: GME-Neutral) is $18.50 (6.5x FY11E EPS). Risks include shift in industry sales from packaged goods to digital, change to consumer preferences, short game cycles, competition, pricing and economic conditions.