Activision Blizzard (ATVI) Growth Opportunities Are Discounted As Call Options - Stephens

February 14, 2019 6:54 AM

Stephens analyst, Jeff Cohen, reiterated his Overweight rating on shares of Activision Blizzard (NASDAQ: ATVI) and cut his price target to $57 from $65 after the company provided 2019 guidance
significantly below consensus in what management framed as a transition year. The company is taking steps to ensure that the pace of content picks up across Blizzard and Activision.

The analyst thinks that growth opportunities have been discounted to near zero value stating "We believe the decision to reallocate headcount from back office functions to game development
teams will be viewed positively. While we acknowledge that it is tough to point to a specific catalyst that will get the stock to move higher i the near term, we believe that at the current valuation (~15x our 2020 estimate of $2.85), many of the company's growth initiatives (mobile, advertising, China, CoD + OWL eSports) have become priced as call options."

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 $44.95 yesterday.

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