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Activision Blizzard Inc.
will face difficult revenue comparisons next year because of the currently strong performance of its Destiny video game product, an analyst said Wednesday.
Activision beat third-quarter expectations Tuesday, citing its newly launched Destiny video game product as well as strong sales of existing products.
The company opened sharply higher Wednesday, trading recently at $20.53 a share, up nearly 3 percent.
Bank of America's Justin Post maintained a Buy rating on Activsion but shaved nearly 4 percent from his price target, bringing it to $25.
Post said the company next year faces "a tough revenue headwind to
make-up against Destiny. But new and pending products could help solve the difficulty.
While Post focused on full-year 2015 revenue comparisons, Jeffries Brian Pitz focused on 2015's first half, when he thinks continued sales of Destiny "will make comps easy."
Pitz maintained a Buy rating Wednesday and boosted his target nearly 4 percent to $27. Pitz called Destiny "the largest new franchise launch in video game history," accounting for $500 million of Activision's adjusted revenue of $1.17 billion in third-quarter revenue.
Activision expects fourth-quarter adjusted earnings of $0.86 a share versus Wall Street's expectation of $0.94 a share.
But Brean's Todd Mitchell thinks the outlook is likely "conservative" and maintained a Buy rating and $25 target.
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