Stifel Sees Continued Q1 'Candy Crush' Decline At King Digital

King Digital Entertainment PLC KING's "Candy Crush Saga" continued its decline in the recent first quarter, an analyst said Tuesday.

But the Ireland-based digital games company will see improved results during the second half of 2015, with new product launches that could push its shares higher, according to Stifel's Drew Crum.

The analyst maintained a Buy rating on King and boosted his target 5 percent to $20.

Higher spending on research and development will result in a sequential first quarter decline of 4 percent in earnings before interest, taxes, depreciation and amortization, Crum said.

Gross bookings for the formerly hot "Candy Crush" will fall sequentially 14 percent to 38 percent of the company's total bookings.

But non-"Candy Crush" titles will grow 70 percent to $365 million.

Crum expects King to launch between three and five new game titles in 2015 and figures the company will leave its current earnings guidance intact later this week.

The Wall Street consensus calls for King to post earnings of $0.53 a share, on a sales decline of 7.3 percent to $563.4 million.

Analysts on average maintain an Overweight rating and $20.70 target on King.