Activision Blizzard (ATVI) Fundamentals Might Take Back Seat to Potential Buy-In or Dividend

February 6, 2013 3:06 PM EST
Get Alerts ATVI Hot Sheet
Price: $38.95 --0%

Rating Summary:
    20 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Analysts at MKM think Activision Blizzard, Inc. (NASDAQ: ATVI) fundamentals will prove less important near-term given 'special situation opportunities' in the stock. These events include a possible leveraged buy-in of Vivendi's 60 percent interest in the ATVI or a more meaningful dividend.

According to analyst Eric Handler, Activision Blizzard has been hording cash since news broke that Vivendi is exploring strategic options for its non-core assets. In his view, a leveraged buy-in of Vivendi's position in Activision would be the preferred use of cash.

"If Vivendi decides to hold onto its Activision stake, we believe a higher dividend might make more sense, as it would avoid a situation in which Vivendi's ownership creeps higher. We believe a 3%-4% dividend yield, which would equate to an annual dividend of $0.35-$0.47 per share (up from the current $0.18 dividend), would catch the attention of yield investors," said the analyst.

MKM Partners has a Buy rating Activision Blizzard with a price target of $17.00.

For an analyst ratings summary and ratings history on Activision Blizzard (NASDAQ: ATVI) click here. For more ratings news on Activision Blizzard click here.

Shares of Activision Blizzard closed at $11.85 yesterday.

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