UPDATE: Brean Capital Reiterates On Activision Blizzard On Position For Upside In 2H14
In a report published Wednesday, Brean Capital analyst Todd Mitchell reiterated a Buy rating on Activision Blizzard (NASDAQ: ATVI), and raised the price target from $24.00 to $25.00.
In the report, Brean Capital noted, “We look for Activision to outperform in 2H14. Investor attention was recently affixed to Los Angeles for the E3 conference, where Activision had a strong show leading off the press conferences for both Microsoft (MSFT, NR, $41.74), with the next Call of Duty, and Sony (SNE, NR, $16.64), with its new IP, Destiny.
"We believe Destiny will be the spark that gets the ball rolling. We look for robust retail sales in September and anticipate a boost in digital revenue from both full-game downloads and year-long DLC subscriptions. We also look for a bounce back from a reinvigorated Call of Duty in November, benefiting from a three-year development cycle and a surging install base of nextgen consoles. In November, the company will also host its annual BlizzCon conference, where we expect announcements for World of Warcraft expansion Warlords of Draenor, and free-to-play titles, HearthStone and Heroes of the Storm.
"While we feel the group is due for a bit of a pause, given what appears to be strong underlying fundamentals for the industry, Activision's preeminent line up at E3, and multiple avenues to upside to guidance and our estimates, we are bumping our TP to $25 from $24 and reiterate our Buy rating.”
Activision Blizzard closed on Tuesday at $21.90.
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