Top Analyst Shines Light on Activision Blizzard, Inc. (ATVI) Overwatch League


This morning, Activision Blizzard, Inc. (NASDAQ:ATVI) announced the sale of the first seven Overwatch League teams. The seven teams represent “just our first announcement,” Overwatch League Commissioner Nate Nanzer said, adding that “additional announcements about other teams joining the league” will be made between now and its launch later this year.

Baird’s top analyst Colin Sebastian commented, “We view this as a significant milestone, but note we are likely still in the early stages of growth. While the company has not publicly established targets for the size of the league, we anticipate significant expansion opportunities still exist, with the potential to attract new investment and add more teams as the league progresses.”

“Activision Blizzard has not provided additional details regarding its plans to monetize this emerging esports league, but we believe it provides a significant incremental revenue opportunity as the company leverages its strong IP and existing media assets. Through the company’s Major League Gaming platform, we anticipate the league will generate revenue through broadcast rights, sponsorship deals, ticket sales, and advertising partnerships. We anticipate further details regarding the company’s monetization strategies as we approach the launch of the inaugural Overwatch League season, currently scheduled to start in 2H17,” the analyst continued.

Sebastian reiterates an Outperform rating on shares of Activision Blizzard, but holds a $60 price target, which represents a slight downside potential from current levels. (To watch Sebastian’s track record click here.)

Out of the 11 analysts polled by TipRanks (in the past 3 months), 10 rate Activision Blizzard stock a Buy, while only one rates the stock a Hold. With a slight upside potential, the stock’s consensus target price stands at $62.95.