MSFT - Activision Blizzard rises as Baird boosts estimates on 'strong' Diablo IV launch

2023-06-16 13:52:17 ET

Activision Blizzard ( NASDAQ: ATVI ) shares rose around 0.5% in mid-day trading on Friday as investment firm Baird raised its bookings and earnings estimates following the "strong" launch of its Diablo IV video game.

Analyst Colin Sebastian, who has an outperform rating and a per-share price target of $90 on Activision ( ATVI ), noted that recent checks and initial sales data from the launch bode well for the video game giant.

"We believe the strong kick-off reflects a combination of high anticipation for the game, solid quality, and pent-up demand for AAA titles," Sebastian wrote in an investor note. "To-date, we estimate ~9-10 million units of sell-through for Diablo and are raising our Q2 unit estimate to 11 million units, which leaves some room for additional upside vs. our current model and consensus."

On Monday, Activision ( ATVI ) said it had sold more than $666M in sell-through over the first five days of the launch, becoming the fastest selling game in Blizzard's history.

As such, Sebastian raised his second-quarter bookings and earnings per share estimates to $2.4B and 91 cents per share, up from a previous view of $2.2B and 73 cents per share.

Sebastian also boosted his full-year bookings estimates to be $9.75B, up from a prior view of $9.67B.

Activision ( ATVI ) is currently working with Microsoft ( MSFT ) to defend the tech giant's $69B proposed acquisition of the Call of Duty maker.

More on Activision

• Microsoft, Activision ask judge for at least 5-day hearing in FTC's suit to block deal
• Activision Blizzard: Diablo Should Make For A Good Quarter, Acquisition Uncertainty Aside
• ATVI Could Be An Arbitrage Play With Or Without The Microsoft Deal

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