Raymond James Sees Takeaways from Activision Blizzard (ATVI) Quarter, PT to $120
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Raymond James reiterated its Outperform rating on shares of Activision Blizzard (NASDAQ: ATVI) and raised its price target to $120.00 from $109.00 after the company reporated 4Q20 results ahead of consensus. Guidance for 1Q21 and the full year 2021 were significantly ahead of expectations, calling for y/y growth even without the release of Overwatch2 or DiabloIV. Call of Duty capped a transformative year with another strong quarter, as Cold War largely picked up where Modern Warfare left off, with Warzone continuing to provide strong audience expansion tailwinds and Call of Duty Mobile providing notable incremental revenue as early indications from China seem robust.
1) Strength in core franchises across the portfolio, with Call of Duty, World of Warcraft, and Candy Crush all posting robust bookings growth in 4Q
2) Guidance implies continued momentum; ATVI's guidance for 1Q and FY21 was above expectations, even without an expected launch of Overwatch 2 or Diablo IV, driven by continued momentum in key franchises
3) Attractive pipeline; the company pointed to a potential remaster release this year, and noted
that multiple World of Warcraft mobile titles are in advanced development
The analyst stated "We continue to think that ATVI has plenty of runway to reach new players through mobile and free-to-play offerings and capitalize on strong demand for planned new titles in existing franchises, and we reiterate our Outperform rating and raise our price target to $120."
Shares of Activision Blizzard closed at $92.68 yesterday.
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