Activision Blizzard Shares Jump – Upgraded Following Overwatch Switch Announcement
Today has proven to be a strong start, with further positive outlooks, for Activision Blizzard (NASDAQ:ATVI) following yesterday's announcement of Overwatch coming to the Nintendo Switch. Having closed yesterday (4th September) at $53.50, Activision is currently trading at $55.21 at the time of writing, a 2.5% increase.
In addition to this boost gained by the announcement of Overwatch on the Nintendo Switch, the Blizzard section of Activision Blizzard has seen a boost through the uptake of World of Warcraft, particularly the new WOW Classic version of the game. Wednesday the 4th also saw a boost in share price from $51.06 to close at $53.50, with Johnson stating:
Early signs are encouraging, with initiatives in World of Warcraft, Hearthstone, and Call of Duty showing progress. In fact, we think the shares could potentially expand higher than our target price with a more robust expansion of multiple in the near term if investors see better signs of progress in its turnaround.
On the back of this recent success, the publisher has seen itself upgraded by a number of analysts. Gerrick Johnson of BMO Capital Markets upgraded Activision to outperform, raising the company's price target from $43 to $60. A number of analysts have followed suit in raising their price target, such as Stephens which has raised from $52 to $65. This is following an earlier reduction in May from $57 to $52.
This will make for a much-needed boost to the company, following the outlook for 2019 being disappointing, leading to a large number of layoffs within the company. The first quarter of the current financial year did prove to be positive, beating expectations, particularly on the back of titles like Sekiro: Shadows Die Twice that performed better than expected, selling 2 million copies in ten days.
With the constant success of Overwatch, now launching on the Nintendo Switch, as well as World of Warcraft and upcoming titles like Call of Duty: Modern Warfare and Warcraft 3 Remastered, Activision Blizzard certainly has a lot of potential, something the market now appears to see.