Activision Blizzard (ATVI): Overwatch and Digital Drive A 2Q Beat - Baird
- Wall Street dips as telecoms slump; AmEx surges
- Microsoft (MSFT) Tops Q1 EPS by 8c
- AMD (AMD) Posts Q3 Operating EPS of 3c; Sees Q4 Revenue Down Sequentially
- AT&T (T) Said to Discuss Idea of Takeover in Time Warner (TWX) Meetings
- Alkermes plc (ALKS) Announces Third ALKS 5461 Phase 3 Met Primary Endpoint in MDD
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
Baird analyst, Colin Sebastian, reiterated his Outperform rating on shares of Activision Blizzard (NASDAQ: ATVI) after Q2 results beat expectations driven by a successful Overwatch launch and ongoing Digital momentum.
Activision reported non-GAAP revenues and EPS well above consensus expectations (+112% Y/Y, +53% ex-King), driven primarily by 129% Digital revenue growth (87% of total.) King indicated that Candy Crush franchise revenues grew Q/Q and Y/Y, with no discernible impact to-date from Pokemon Go.
The analyst stated that "Key drivers remain positive, including console installed base, mobile usage, in-game monetization and Digital mix shift. On the call, management indicated there were $1 billion of in-game content sales (including doubling of Call of Duty content) along with sustained or higher levels of engagement. We note that Overwatch and World of Warcraft are also helping AB carve out a larger market in Asia (e.g. China and Korea.) Looking ahead to the holiday period, Call of Duty: Infinite Warfare preorders are still tracking below last year levels, although in-line with management's expectations. The company plans to accelerate marketing efforts for the game closer to launch. Lastly, Pokemon Go does not appear to be impacting usage or monetization of Candy Crush, consistent with commentary from other publishers".
Based on increasingly Digital-oriented revenues and the successful launch of Overwatch, reiterating Outperform rating, raise price target to $46.
price target of $46.00 (from $43.00)
Shares of Activision Blizzard closed at $40.83 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Baird Remains Sidelined on Seagate Technology (STX) Following 1Q EPS Beat
- UPDATE: Wells Fargo Upgrades Vail Resorts (MTN) to Outperform
- Lam Research (LRCX) PT Raised to $95 at Nomura But Remains Sidelined
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesRobert W Baird
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!