Brocker.Org: Analysts Bullish on Activision Blizzard


Santa Monica, Calif.-based interactive entertainment company Activision Blizzard Inc. (ATVI) saw its shares soar to all-time highs on another strong quarterly report released May 4.

After earnings, Activision has received price target increases from at least six investment banks. (See also: Betting on the Booming eSports Industry.)

More Upside from Overwatch

Analysts applauded better-than-expected top line and bottom line numbers from Activision in the latest quarter, despite the fact that the company released no new games. Profits were driven by digital sales, including game downloads and recurring revenue from in-game purchases, from popular games such as as Overwatch. While management’s full-year 2017 forecast came in below expectations, analysts remain bullish overall, indicating the firm may be conservative with outlook.

Credit Suisse’s Stephen Ju increased his price target on ATVI by $1 to $62, indicating that because of growing digital transactions, “there is every possibility for outperformance to continue into the remainder of 2017 as well as into 2018.”

Raising Targets

Jefferies hiked its price target on the video game developer’s stock to $68 from $55. “Activision posted another huge beat with key games like Overwatch driving robust growth of in-game spending. The impressive performance comes despite investor fears that weak frontline holiday sales of Call of Duty would translate into weak first-half 2017 performance,” wrote Jefferies analyst Timothy O’Shea.

Piper Jaffray analysts increased their price target on shares of the Call of Duty game maker to $60 from $55, while analysts Stifel maintained a buy rating and lifted their price target to $60 from $59. BMO Capital Markets also increased its price target on Activision stock to $47 from $42, reiterating a market perform rating based on valuation.

Closing up 0.3% at a price of $53.99 on Monday, ATVI reflects an approximate 43.4% gain over the 12-month period and a 49.5% incline year-to-date, as consecutive earnings beats and promising game releases work to consistently boost investor confidence. (See also: Analysts Optimistic on Activision’s Call of Duty.)