Activision Blizzard (ATVI) PT Raised to $33 at Piper Jaffray; Enter the 'Sweet Spot'

Piper Jaffray analyst Michael Olson reiterated an Overweight rating and raised his price target on Activision Blizzard (NASDAQ: ATVI) to $33.00 (from $30.00), saying VG software is entering "sweet spot".

Olson commented, "Next gen consoles have been in market for ~20 months (Nov-13 launch) and experienced rapid uptake. We believe the footprint of next gen hardware (~40m units) is now large enough to drive sustainable software growth. We expect that CY15 & CY16 will be the equivalent to CY07 & CY08 during the prior console cycle; both were years that experienced significant industry software growth, following several years of decline or limited growth in the space. This is positive for video game publishers. For Activision, '07/'08 publishing segment sales averaged 52% vs. our '15 & '16 estimates of 3% and -3%, respectively. The mid-point ATVI PE multiple on NTM EPS in '07/'08 was 19x, while the peak multiple was 26x vs. the current 18.7x multiple. Overall, we remain confident that the company can benefit from this "sweet spot" in industry growth."

For an analyst ratings summary and ratings history on Activision Blizzard click here. For more ratings news on Activision Blizzard click here.

Shares of Activision Blizzard closed at $28.78 yesterday.

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