The Future of Activision Blizzard Stock: Growth Catalysts, New Games and More

Activision Blizzard (NASDAQ:ATVI) is in the spotlight after the company received several bullish comments from financial analysts. Earlier in September, investment firm Needham’s analyst Laura Martin increased the stock’s price target, citing an increasing user base amid the pandemic-enforced lockdowns worldwide. The analyst said that Activision Blizzard’s user base jumped 30%, and play times increased 70%. Activision Blizzard saw its playtime metrics jump by 8 times in the second quarter, according to the analyst, thanks to lockdowns and the company’s solid execution.

Video game consumption worldwide is rising, as people stay at home and spend more time playing games or watching others play video games on streaming websites. According to data, videogame sales jumped 37% in August on a year-over-year basis and reached $3.33 billion. As a result, total video games sales year to date have reached $29.379 billion, up 23% from the same period in 2019. Call of Duty: Modern Warfare, produced by Activision Blizzard, was one of the most famous games of 2020.

Beyond Pandemic

However, Martin is not only bullish on Activision Blizzard due to the coronavirus environment. The analyst thinks that the gaming industry has a bright future even beyond the pandemic. Some catalysts for the Activision stock include people spending more time on streaming services, YouTube Gaming live, Facebook Gaming, eSports and gaming events. The analyst said viewership of Twitch, a game-streaming service, is up 73% year over year during the pandemic, while YouTube Gaming Live concurrent viewership is up 15.5% sequentially to an all-time high.

Increased Outlook

For the fourth quarter of 2020, Needham now expects Activision Blizzard to report EPS of $1.05, up from $0.90, and full-2020 EPS at $3.21, up from $3.05. The firm also increased its revenue estimate for the company to $7.763 billion, up from $7.625 billion. The firm has a price target of $102 for the stock.

Catalysts

Truist Securities in September published its video game report, giving bullish comments to three major gaming companies, including Activision Blizzard. The firm said upcoming titles in the company’s big games like Call of Duty, Crash Bandicoot, World of Warcraft and Tony Hawk would prove fruitful for the stock. It has an $87 price target for the company. The company has also announced plans to release Call of Duty: Black Ops Cold War on November 13.