Piper Jaffray’s top analyst Michael Olson was out pounding the table on shares of Activision Blizzard, Inc. (NASDAQ:ATVI) Friday, reiterating an Overweight rating and price target of $70, which implies an upside of 10% from current levels.
Olson wrote, “Call of Duty: WWII launched at midnight (11/3) and has received solid reviews. The current “metacritic” rating on PS4 is 86 on 31 reviews, well above last year’s Infinite Warfare at 77. Investors have cited concerns around CoD fatigue, but we believe the return to WWII may excite fans and attract lapsed players. We anticipate sales of 18M units for 2017, but given solid reviews and a larger next-gen installed base, our estimate could prove conservative. Similarly, we believe company guidance for Q4, which is negatively impacting the ATVI shares today, is likely building in a heavy dose of conservatism. Additionally, we anticipate strong digital attach rates for bundled and a la carte DLC, as well as microtransactions.”
“We look for the Activision segment to drive growth in 2H18 with the return of Treyarch’s Call of Duty, the developers of Black Ops, which has been on a 3-year development cycle. We are currently estimating 21.5M units of what has become the most popular version of CoD, up from 18M for the 2017 version of CoD from Sledgehammer (Call of Duty: WWII). We believe the Activision segment can overcome a difficult y/y comparison from the launch of a new Destiny title in 2017,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Michael Olson has a yearly average return of 18.7% and a 67% success rate. Olson has a 37.6% average return when recommending ATVI, and is ranked #71 out of 4704 analysts.
Wall Street’s confidence backing this video gaming giant is strong, with TipRanks analytics showcasing ATVI as a Strong Buy. Based on 18 analysts polled in the last 3 months, 15 rate a Buy on Activision stock, while 3 rate a Hold. The 12-month average price target stands at $72.44, marking a nearly 13% upside from where the stock is currently trading.