Market Overview

Piper's Earnings Preview For Gaming Sector: 3 Stocks At Overweight

Share:
Piper's Earnings Preview For Gaming Sector: 3 Stocks At Overweight

Video gaming companies are on deck to report their quarterly earnings results, and Michael Olson of Piper Jaffray offered his take in a research report.

Electronic Arts

Electronic Arts Inc. (NASDAQ: EA) (reporting November 1) is expected to report an in-line quarter even though September's NPD software sales show a 21 percent year-over-year decrease due to a difficult comp.

The company's guidance calls for a 6 percent decrease in total revenue to $1.08 billion, which matches the analyst's expectations. However, the company increase its full-year fiscal 2017 guidance slightly higher due to higher digital revenue and a stronger than expected launch of "Battlefield 1."

Shares of Electronic Arts remain Overweight rated with an unchanged $89 price target.

Related Link: Are Video Game Releases An Opportunity For Traders?

Activision Blizzard

Activision Blizzard, Inc. (NASDAQ: ATVI) (reporting November 4) is expected to deliver a strong third-quarter earnings print despite NPD data showing a 38 percent year-over-year decrease in revenue in the Activision segment due to the move of "Skylanders" toward an October launch instead of September.

The analyst is expecting a 76 percent increase in revenue from the Blizzard segment due to the launch of a "Wow Legion" expansion.

Olson is expecting management to boost its fiscal 2016 guidance modestly based on a conservative outlook for "Overwatch" digital content sales and limited synergies from its King Digital acquisition.

The analyst also believes Activision is on track to generate $1 billion in incremental revenue by 2020 through King advertising, eSports and consumer products and content.

Shares of Activision Blizzard remain Overweight rated with an unchanged $51 price target.

Take Two Interactive

The analyst's bullish stance on the video sector extends to Take-Two Interactive Software, Inc. (NASDAQ: TTWO).

In a research report on Monday, Olson reiterated an Overweight rating and $51 price target after the company released its first RDR2 trailer.

The analyst believes that interest in "RDR 2 "ranks "among the best selling titles of the past few years" given the 4.4 million trailer views in a day.

The trailer's release also offers investors much needed visibility into its 3–4-year outlook.

At Last Check ...

  • Activision was up 1.91 percent at $45.39.
  • Electronic Arts was up 1.43 percent at $84.06.
  • Take-Two was up 1.77 percent at $45.78.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for ATVI

DateFirmActionFromTo
Aug 2020CitigroupMaintainsNeutral
Aug 2020BMO CapitalMaintainsOutperform
Aug 2020StifelMaintainsBuy

View More Analyst Ratings for ATVI
View the Latest Analyst Ratings

 

Related Articles (ATVI + EA)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Previews Analyst Ratings Movers Tech Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
WPMScotiaBankMaintains55.0
NPIScotiaBankMaintains39.0
MRUScotiaBankMaintains66.0
LUGScotiaBankUpgrades14.0
JWELScotiaBankMaintains37.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com