UBS analyst Eric Sheridan lowered his price target on Activision Blizzard (NASDAQ: ATVI) to $36 from $44 following disappointing Q4 results and outlook. The firm maintained a Buy rating saying the long-term thesis is intact.

Sheridan commented, "Despite a strong quarter for the Call of Duty franchise, ATVI's Q4 results & forward guidance fell short of expectations as the company's casual titles (Skylanders & Guitar Hero) underperformed and a Destiny sequel was shelved until 2017 (vs. expectations for 2016). That said, stronger than expected next-gen console revenues (+77% YoY vs. UBSe +55%) & continued mix shift towards digital (37% of revs in Q4'15 vs. 31% Q4'14) suggest industry tailwinds persist – as a result, our outlook for continued margin expansion & improved FCF generation (with potential for outsized cash returns to shareholders on a multi-year view) remains unchanged. In the near-term, we expect investors to look to the KING acquisition and the launch of the Overwatch title as key drivers for upside to 2016 expectations. Notably, while management's prepared remarks suggest a keen focus on the eSports & media/film opportunities, investment levels appear measured at present and are unlikely to drive medium-term performance."

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 $30.52 yesterday.