Activision Stock (NASDAQ:ATVI)
Activision Blizzard (NASDAQ:ATVI) shares climbed higher in early trading on Thursday, despite the United Kingdom’s decision to deny the company’s proposal to acquire Microsoft (NASDAQ:MSFT). This was due to the fact that analysts applauded the company’s solid performance in the first quarter.
Mike Hickey, an analyst at Benchmark, reaffirmed the firm’s buy recommendation on Activision stock and said that titles like Diablo IV would “likely drive growth upside” owing to high pre-orders.
Even though Hickey described the choice made by the firm to not pass through first-quarter upside to forecast as “somewhat disappointing,” it is not inconsistent with how the company behaved before the epidemic. In addition, according to Hickey, Activision stock is now selling at a discount to Electronic Arts (EA), which is inconsistent with the company’s historical performance.
Hickey told investors, “we see considerable growth ahead over an exceptional balance sheet.”
Even without Microsoft, the company is “well positioned” to grow double-digits year-over-year, according to Wedbush analyst Nick McKay, who noted that the firm expects net bookings to grow “at least” 30% year-over-year and operating income to grow “at least” 40%. He also maintained the firm’s outperform rating and $95 per-share price target.
McKay noted that the company had “the potential for strong growth next quarter” due to “strong presale numbers for Diablo IV,” “continued strength in its Call of Duty franchise,” and the addition of Crash Team Rumble (and maybe Call of Duty: Warzone Mobile) to the Q2 roster.
Gerrick Johnson, an analyst at BMO Capital Markets, said that Activision has an “upside” to $100 per share, which might suggest a possible gain of 25% from present levels. The company’s good quarterly performance proves this. It is important to note that Microsoft is not a factor in the equation.
In the note, Johnson said, “We think these results highlight the success ATVI has had turning around its business and growing its core franchises, positioning it well as a (seemingly more likely) standalone entity.” “We think these results highlight the success ATVI has had turning around its business and growing its core franchises,” Johnson wrote.
Both businesses have said that they intend to challenge the decision made by the United Kingdom.
Featured Image: Megapixl © Selagin
Author Shariq Khan 
