UPDATE: Hilliard Lyons Downgrades Activision Blizzard to Long-Term Buy, Names $18 PT Following Good 1Q Revenues

In a report published Friday, Hilliard Lyons analyst Jeffrey S. Thomison downgraded the rating on Activision Blizzard ATVI from Buy to Long-Term Buy, but named an $18.00 price target. In the report, Thomison noted, “1Q revenues surpassed our expectations. Non-GAAP revenues were $804 million, up 37% from a low volume quarter a year ago and above our projection of $695 million and the street consensus figure of $705 million. The quarter was led by catalog sales from the Call of Duty and Skylanders franchises, as well as Blizzard PC titles such as StarCraft II: Heart of the Swarm (a late March release). Margin improvement contributed to better-than-expected profits. Cost of sales grew less rapidly than revenues and product development costs actually declined. As a result, non-GAAP EPS were $0.17 versus the year ago figure of $0.06. Our estimate was $0.10 and street consensus was $0.11.” Activision Blizzard closed on Thursday at $14.39.