Atlantic Equities said that Microsoft’s acquisition approval could mean a nice jump for Activision Blizzard stock. Analyst Kunaal Malde upgraded video game stock to overcrowding, citing Microsoft’s acquisition capabilities and the company’s strong content system. “We treat risk/reward as positive and our $84 PT price drop assumes a 50% probability of the $95/share deal completing while valuing the standalone company at,” he said. at $73/share. “Amid a tough economic downturn heading into recession, this unusual setup will prove to be relatively attractive.” Shares of Activision Blizzard are up more than 15% this year but could rise about 10% more from Wednesday’s close even after the company cut its price target to $84. Approving a buyback at $95 per share would suggest a 24% price increase for the stock. Malde also said the company should be in a strong position even if the deal doesn’t go through, noting that Activision has “started distributing its strong content channel, which will see the company.” return to meaningful growth in CY23.” In the same note, Malde downgraded Electronic Arts shares to neutral despite the stock’s better performance this year. He cited risks to the company’s asset release plan in the fourth quarter and foreign exchange difficulties. Shares of video game stocks fell just 3.8%, while the S&P 500 fell 17.2%. – CNBC’s Michael Bloom contributed reporting
