Business

Analyst says Activision stock looks undervalued with or without deal with Microsoft


The stock price of Activision Blizzard Inc. has been caught up in speculation surrounding whether Microsoft Corp. whether or not it will get regulatory approval for a $69 billion deal for the video game publisher, but Wells Fargo analyst Brian Fitzgerald thinks the stock looks attractive regardless of whether merger will happen or not. happen.

Fitzgerald Upgrades Activision
ATVI,
+1.01%

stocks to overweight from the second weight on the heel of a Political report from last week said the US Federal Trade Commission likely to file an antitrust lawsuit To prevent agree with Microsoft
MSFT,
-0.63%
.

“While the antitrust landscape remains uncertain, we believe that ATVI’s current price does not reflect its prospects as an independent video game publisher nor its outstanding bids. of MSFT is 95 dollars [per] share,” Fitzgerald wrote in his note to clients.

He commented that Activision’s stock looks undervalued because the market doesn’t “consider the impact of a $3 price [billion] parting costs,” underestimates Activision’s independent potential and may miscalculate the likelihood that the deal will actually succeed.

“We are optimistic about ATVI’s independent prospects with the launch of the record-breaking ‘Call of Duty’ ($1 .) [billion] sold out within the first 10 days), strong interaction in “Overwatch 2,” and continues to thrive on Mobile (despite negative comments from other major mobile game publishers),” wrote Fitzgerald.

He also noted that Activision has “an extensive portfolio of wholly owned assets.” [intellectual property],” strong appeal to PC gamers and the compelling opportunity offered by mobile investments.

He kept his $95 price target on shares of Activision, up 1.2% in premarket action on Monday. That $95 target is equal to Microsoft’s acquisition price.

Truist Securities analyst Matthew Thornton was also bullish on Activision stock Monday morning, writing about the “favorable risk-reward” balance in the stock.

The company “should have a successful 2023,” Thornton wrote, citing, among other things, the health of “Call of Duty,” “World of Warcraft,” and Blizzard’s mobile business.

He further commented that Activision “has a capital surplus
paper.” Thornton estimates that the company will have more than $10 billion in net cash by the end of 2023, or more than $12 billion to $13 billion when the break-up fee is included. “a substantial acquisition.”

Thornton upgraded the stock to buy from hold, adding that the company has the strongest short-term release list of any video game publisher.

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button