Activision-Blizzard (ATVID): Kung Fu Panda & Guitar Hero Blow Out Q2

Yesterday, Activision-Blizzard (ATVID) announced preliminary results for Activision’s June quarter (Q2) that were very positive. Activision now now sees $650 million in Q2 sales and EPS of $0.21‐$0.23 vs. $500 million and $0.13 previously.

Driving the excellent results were strong performances from the games Kung‐Fu Panda, Guitar Hero: On Tour and Guitar Hero: Aerosmith.

This good news gave Deutsche an opportunity to bask in the glow of its bullishness and reiterate its BUY:

We reiterate our BUY investment rating on shares of Activision‐Blizzard, given its compelling title line up, market share gains and valuation compared to the competition.

[D]espite structural challenges industry wide…the company continues to perform well with a narrow yet productive title offering. We think the industry may be heading into a softening growth environment in coming months (esp. X360 and PS2), further pressuring growth and profits for select companies industry wide…

With the addition of Blizzard, the merger would add another recurring revenue stream with robust margins via World of Warcraft.

Deutsche reiterates BUY on Activision-Blizzard (ATVID), target price $42.

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