Baird analyst Colin Sebastian reiterated an Outperform rating and boosted his price target on Activision Blizzard (NASDAQ: ATVI) to $42.00 (from $38.00) following a better-than-expected start to 2015, driven by Digital.

Sebastian commented, "ATVI Q1 revenues of $908 million (+29% Y/Y, roughly flat ex-King) were well-above consensus expectations, driven by strong digital revenue growth (88% of total), including 10% organic growth of Activision's online community, 23% growth of Blizzard's community, and the partial-quarter contribution from King, which included Q/Q growth for the Candy Crush franchise. With the seasonally stronger 2H ahead, and the launch of new franchise Overwatch this month, Activision remains a top pick, with a raised $42 price target."

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Shares of Activision Blizzard closed at $34.91 yesterday.