Activision Blizzard (ATVI) PT Lifted to $40 at UBS on Solid Results and King Deal
UBS analyst Eric Sheridan reiterated a Buy rating and boosted his price target on Activision Blizzard (NASDAQ: ATVI) to $40.00 (from $36.00) following solid results and the KING takeover.
commented, "While ATVI delivered another quarter of upside across revenues, EBITDA and EPS driven by the strength of its title slate, the news of the day (and resulting investor debate) was focused squarely on the decision to acquire King Digital for $18/share. In our view, the King acquisition accelerates ATVI's exposure to mobile at a price that is solidly accretive on '16/'17 with a tactical use of off-shore cash to complete the acquisition. Going forward, we look to this Friday's analyst day for additional color on near-term title trends and plans for '16 IP launches around key existing franchises (World of Warcraft, Destiny and Call of Duty) and upcoming launches like Overwatch. On the acquisition, we expect investors will be content with accretion analysis for now but will be closely looking to integration and execution post close in 2H16 for continued evidence of management's skill at transformative deals."
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Shares of Activision Blizzard closed at $35.82 yesterday.