Activision Stock Hits Buy Point On Earnings Report, But Reverses
Activision Blizzard (ATVI) stock crossed a technical buy point on Friday, but reversed in heavy trading. The action happened after the video game publisher late Thursday delivered better-than-expected third-quarter results, but missed views with its fourth-quarter outlook.
Activision earned 60 cents a share, up 15% year over year, on sales of $1.9 billion, up 17% (on a non-GAAP basis), in the September quarter. Analysts expected 49 cents and $1.74 billion.
Activision’s strong performance in the third quarter was driven by such hit games as “Destiny 2” and “Overwatch,” analysts said. On Friday, Activision released its highly anticipated shooter game “Call of Duty: WWII.”
For the December quarter, Activision guided to adjusted earnings per share of 82 cents on non-GAAP sales of $2.34 billion. Wall Street was modeling 89 cents and $2.44 billion.
It was down 2.5%, near 63.80, in afternoon trading on the stock market today.
IBD’S TAKE: Activision Blizzard has an IBD Composite Rating of 90, meaning it has outperformed 90% of stocks in key metrics over the past 12 months. For more analysis on Activision, visit the IBD Stock Checkup.
Activision stock received price-target hikes from at least four Wall Street firms on Friday: Baird, Jefferies, KeyBanc and UBS, all of which rate it as buy.
Jefferies analyst Timothy O’Shea is the most bullish of the group. He reiterated his buy rating on the stock and raised his price target to 82 from 80.
“Solid Q3 results underscore how Activision is benefiting from a multitude of powerful tailwinds that are transforming the company into a more recurring and profitable model,” O’Shea said in a report.
CFRA analyst Scott Kessler maintained his bearish call on Activision. He kept his sell rating and cut his price target to 53 from 58.