In a report published Monday, Barclays Capital analyst Christopher D. Merwin initiated coverage on Activision Blizzard ATVI with an Overweight rating and $22.00 price target.
In the report, Barclays Capital noted, “We are initiating coverage of Activision with an Overweight rating and $22 price target. While the opportunity for casual and social gaming has recently generated a lot of buzz, we believe the demand for console and PC games is largely underappreciated by the market. Furthermore, we believe the upcoming console cycle—historically a time of earnings volatility for video game publishers—is a risk that has been well-telegraphed by management and sets the bar lower for future positive earnings surprises, likely in the form of margin expansion from new monetization formats and digital distribution. Lastly, we believe the recently completed leveraged recapitalization of the business should free up Activision's future free cash flow for incremental capital returns.”
Activision Blizzard closed on Friday at $17.59.
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