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How Do Analysts View Activision Blizzard Stock?

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Jun. 10 2019, Updated 12:15 p.m. ET

Goldman Sachs upgraded ATVI

On June 10, investment bank Goldman Sachs (GS) upgraded Activision Blizzard (ATVI) stock from a “neutral” to a “buy” and added the stock to its America’s Conviction List. Goldman Sachs analyst Michael Ng also raised the 12-month target price for ATVI by $4.0 to $54.0.

Ng stated that ATVI has lost significant value and is at the cusp of an earnings inflection, providing investors with the prospect of an attractive entry point. Ng expects ATVI to post EPS of $2.11 in 2019. He expects its earnings to rise 29.0% in 2020 to $2.72 and 9.6% in 2021 to $2.98.

Ng is optimistic about popular franchises such as Call of Duty and Overwatch. He also expects the upcoming mobile installment of Diablo and content updates for World of Warcraft and Hearthstone to increase user engagement.

Shares of Activision Blizzard are up 7.3% since Ng upgraded the stock on May 28, 2019. Investors will be hoping that ATVI now rises after losing close to 50.0% since October 2018.

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Analysts’ estimates

Of the 27 analysts tracking ATVI, 20 have recommended “buys,” seven have recommended “holds,” and none have recommended “sells.” Analysts have a 12-month average target price of $52.93 on the stock, which indicates a potential upside of 16.6% from its current price.

Shares of peer companies Take-Two Interactive (TTWO), Electronic Arts (EA), and Zynga (ZNGA) are trading at discounts of 8.0%, 14.0%, and 6.6%, respectively, to analysts’ average estimates.

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