Citi Maintains 'Buy' Rating on Activision (ATVI) After Attending Analyst Day

September 16, 2008 2:12 PM EDT

Citi maintains 'Buy' rating on Activision (Nasdaq: ATVI). Price target $22.50.

Citi analyst says, "We attended ATVI's analyst day Monday in Santa Monica and came away confident in our Buy rating, the company's 2008 Holiday Season lineup and its 2009 opportunity. ATVI did not update FY09 guidance nor did it offer specific plans for investing its $3bn cash hoard. We expect a hybrid M&A/buyback strategy (it hasn't bought a share in three years)...Our Buy rating is predicated on: 1) ATVI continuing to take market share in this console cycle on the strength of its leading franchises and the addition of the Guitar Hero and James Bond franchises, 2 keys to ATVI's plans for deeper international penetration, 2) ATVI's strategic plan helping to allocate capital even more efficiently this cycle, and 3) our work suggesting peak operating margin guidance may prove conservative."

Activision Blizzard Inc., formerly Activision, Inc., is an online and console game publisher. On July 9, 2008, the Company was formed by combining Activision, Inc., an independent publisher of interactive entertainment, and Vivendi Games, Vivendi SA’s interactive entertainment business. [SM]

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