Activision Blizzard (ATVI): As Good As It Gets? - BMO
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BMO Capital analyst Gerrick Johnson, reiterated his Market Perform rating on shares of Activision Blizzard (NASDAQ: ATVI) after the company reported 2Q16 Non GAAP EPS of $0.54, which was $0.12 ahead of our and the Street's $0.42 expectation. The result was also $0.16 ahead of the company's $0.38 per share guidance.
Despite the $0.16 outperformance, the company raised full-year non-GAAP (as previously defined) EPS guidance by only the 1Q business outperformance of $0.12, to $1.90 from $1.78, which was roughly in line with the prior Street consensus of $1.88. The analyst is surprised the company did not lift its expectation for the balance of the year but management does have a reputation for guiding conservatively. Despite that reputation, the reaction in the market was muted on the news leaving the analyst to wonder if investors could be concerned that this is the best it gets for a while, with a very successful Overwatch launch in a traditionally smaller quarter and a near-term boost to World of Warcraft from the Warcraft movie.
The company still has several big releases left in the year, including: World of Warcraft: Legion (8/30), Destiny: Rise of Iron (9/20), Skylanders: Imaginators (10/16), Call of Duty: Infinite Warfare (11/4), and one more non-Candy Crush game from King.
The price target is increased to $38.
Shares of Activision Blizzard closed at $40.56 yesterday.
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