Brean Capital Reiterates Buy Rating, $15 PT on Activision Blizzard

In a report published Friday, Brean Capital reiterated its Buy rating and $15.00 price target on Activision Blizzard

. Brean Capital noted, “A history of beating guidance and the potential for a buy-in are likely to support upside to current share prices. We expected modest upside to 4Q12 guidance and a weak 2013 outlook and got greater variance than we expected on both fronts. Activision reported 4Q12 net revenue of $2.6 billion and non-GAAP EPS of $0.78, versus guidance of $2.4 billion and $0.70, but guided to 2013 net revenue of $4.18 billion and non-GAAP EPS of $0.80, well below our estimates for $4.3 billion and $0.95. We believe 2013 guidance will come under scrutiny given a strong 1Q13 outlook and Activision's well established practice of beating and raising its outlook. Moreover, new disclosure language, no share repurchases in 4Q12, and cash reserves of $5.3 billion at the end of 2012 are likely to give credence to the idea that it is positioning itself to retire some, or all, of Vivendi's shares, in a transaction that we estimate could be over 20% accretive to our 2013 and 2014 non-GAAP EPS estimates. As a result, we reiterate our Buy rating and $15 target price for ATVI.” Activision Blizzard closed on Thursday at $12.06.