Zacks Investment Research Downgrades Activision Blizzard (ATVI) to Sell

Activision Blizzard (NASDAQ:ATVI) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report released on Thursday.

According to Zacks, “Activision’s biggest problem is that it depends heavily on a handful of franchises. Though Activision has a powerful lineup of games that can be repeatedly upgraded, there is no assurance that a particular game will be a hit. Moreover, the video game publishing industry is intensely competitive which begets caution. Additionally, continued investment in the digital market may also hurt its profitability in the near term. The company has mixed record of earnings surprises in recent quarters. However, Activision's enviable IP, strength in digital business, creation of a studio and foray into e-sports bodes well for long-term growth. Shares have outperformed the industry in the past year.”

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Other research analysts have also recently issued reports about the stock. SunTrust Banks set a $77.00 price target on shares of Activision Blizzard and gave the company a “buy” rating in a research report on Wednesday, January 24th. BidaskClub raised shares of Activision Blizzard from a “hold” rating to a “buy” rating in a research report on Tuesday, January 16th. BTIG Research started coverage on shares of Activision Blizzard in a research report on Monday, December 18th. They set a “buy” rating and a $80.00 price target for the company. Wedbush set a $75.00 price target on shares of Activision Blizzard and gave the company a “buy” rating in a research report on Thursday, January 11th. Finally, KeyCorp set a $80.00 price target on shares of Activision Blizzard and gave the company a “buy” rating in a research report on Monday, January 8th. One equities research analyst has rated the stock with a sell rating, five have issued a hold rating, twenty-five have issued a buy rating and one has assigned a strong buy rating to the company’s stock. The stock has a consensus rating of “Buy” and an average price target of $75.03.

Shares of NASDAQ ATVI opened at $65.88 on Thursday. Activision Blizzard has a 1 year low of $48.50 and a 1 year high of $79.63. The stock has a market cap of $49,955.89, a P/E ratio of 32.14, a price-to-earnings-growth ratio of 1.79 and a beta of 1.16. The company has a debt-to-equity ratio of 0.46, a current ratio of 1.78 and a quick ratio of 1.77.

Activision Blizzard (NASDAQ:ATVI) last issued its quarterly earnings results on Thursday, February 8th. The company reported $0.94 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.92 by $0.02. Activision Blizzard had a net margin of 3.89% and a return on equity of 17.48%. The company had revenue of $2.64 billion during the quarter, compared to analysts’ expectations of $2.55 billion. During the same period last year, the company posted $0.65 EPS. Activision Blizzard’s revenue was up 7.7% on a year-over-year basis. research analysts forecast that Activision Blizzard will post 2.52 earnings per share for the current fiscal year.

In other news, Director Brian G. Kelly sold 1,700,000 shares of Activision Blizzard stock in a transaction that occurred on Friday, February 23rd. The shares were sold at an average price of $70.65, for a total value of $120,105,000.00. Following the completion of the sale, the director now directly owns 69,474 shares in the company, valued at $4,908,338.10. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, insider Dennis M. Durkin sold 21,488 shares of Activision Blizzard stock in a transaction that occurred on Monday, March 12th. The stock was sold at an average price of $77.18, for a total transaction of $1,658,443.84. Following the completion of the sale, the insider now owns 151,314 shares of the company’s stock, valued at $11,678,414.52. The disclosure for this sale can be found here. Insiders sold 2,701,258 shares of company stock valued at $191,727,094 over the last quarter. Company insiders own 2.12% of the company’s stock.

Hedge funds have recently made changes to their positions in the company. Cambridge Investment Research Advisors Inc. grew its position in Activision Blizzard by 80.9% during the fourth quarter. Cambridge Investment Research Advisors Inc. now owns 108,861 shares of the company’s stock valued at $6,893,000 after buying an additional 48,667 shares during the period. QUANTRES ASSET MANAGEMENT Ltd bought a new stake in Activision Blizzard during the fourth quarter valued at approximately $1,171,000. Fox Run Management L.L.C. bought a new stake in Activision Blizzard during the fourth quarter valued at approximately $731,000. Gulf International Bank UK Ltd grew its position in Activision Blizzard by 1.8% during the fourth quarter. Gulf International Bank UK Ltd now owns 227,499 shares of the company’s stock valued at $14,405,000 after buying an additional 4,100 shares during the period. Finally, Oppenheimer Asset Management Inc. grew its position in Activision Blizzard by 129.4% during the third quarter. Oppenheimer Asset Management Inc. now owns 18,917 shares of the company’s stock valued at $1,220,000 after buying an additional 10,670 shares during the period. Hedge funds and other institutional investors own 85.57% of the company’s stock.

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Activision Blizzard Company Profile

Activision Blizzard, Inc develops and distributes content and services on video game consoles, personal computers (PC), and mobile devices. The company operates through three segments: Activision Publishing, Inc; Blizzard Entertainment, Inc; and King Digital Entertainment. The company develops, publishes, and sells interactive software products and entertainment content for the console and PC platforms through retail and digital channels, including subscription, full-game, and in-game sales, as well as by licensing software to third-party or related-party companies; and offers downloadable content.

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