Deutsche Bank Maintains Buy, $16 Target on Activision

Deutsche Bank reiterates its Buy rating and $16 target price on Activision (NASDAQ: ATVI) on a solid pipeline and potential expansion.

Deutsche Bank says, "We believe a premium to other industry participants' multiples is warranted given Activision's compelling product line-up, strong subscription-based business in Blizzard, market share gains, higher margins, and potential upside to earnings from leverage against generally fixed technology costs. Moreover, while the current economic environment creates some uncertainty, we highlight that Blizzard provides strong visibility to revs and profits and moves Activision away from being pinned down by the video game cycle. We think this visibility and diversification, coupled with Activision's now industry leading profit margins, should command a premium to the sector average."

ATVI closed at $12.56 per share on Thursday.