Activision Blizzard shares remain in a bull market supported by Q4 results

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Mar 9, 2021
  • Piper Sandler has raised its price target to $120 on Activision Blizzard
  • Activision Blizzard raised its 2021 guidance
  • If the price jumps above $100, the next target could be around $110

Activision Blizzard (NASDAQ: ATVI) shares have advanced more than 3.6% this Tuesday, and the current share price stands around $92.6. Wall Street remains bullish on this stock as it sees Activision Blizzard well-positioned for success in 2021 and, more importantly, beyond.

Fundamental analysis: Wall Street remains bullish on Activision Blizzard

Activision Blizzard, Inc. is an American video game holding company with five business units: Activision Publishing, Blizzard Entertainment, King, Major League Gaming, and Activision Blizzard Studios. Activision Blizzard shares continue to trade above the $90 support level after the company reported better than expected Q4 results.

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Activision Blizzard reported Q4 results this February; total revenue has increased by 12.5% Y/Y to $3.05B while Q4 GAAP EPS was $0.65 (beats by $0.08). Activision Blizzard finished this quarter with 400 million players in 190 countries, while the company should add even more customers given by the planned release of new content across multiple platforms.

“Much of our success in 2020 was due to strong product and commercial execution, driving structural improvements in our largest owned franchises. Overall, we are entering 2021 with momentum in our biggest franchises, and a pipeline of content and growth initiatives that we expect will enable each of our segments to grow operating income for the full year 2021,” said Dennis Durkin, Chief Financial Officer of Activision Blizzard.

The company declared a $0.47/annual share dividend, representing a 14.6% increase from the prior dividend of $0.41. It is also important to mention that the board of directors announced a stock repurchase program of up to $4B of its outstanding common stock during the period of two years.

Wall Street remains bullish on Activision Blizzard; Michael Pachter, an analyst from Wedbush, called this fourth quarter the company’s best ever and increased its price on ATVI to $125. Piper Sandler has also raised its price target to $120 on ATVI after the Q4 earnings report as it sees Activision Blizzard well-positioned for success in 2021 and, more importantly, beyond.

Positive information is that global video game sales rose 42% in January 2021, which indicates that ATVI could have another strong quarter.

Technical analysis: $100 represents a strong resistance level

Technically looking, Activision Blizzard shares could advance again above the $100 resistance level, while the first sign of the trend reversal could be if the price falls below the $80 support.

Data source: tradingview.com

If the price jumps above $100, it would be a signal to trade shares, and the next target could be around $110, but if the price falls below the $80 support level, it would be a firm “sell” signal.

Summary

Activision Blizzard reported better than expected Q4 earnings in February, and the company raised its 2021 guidance. Wall Street remains bullish on this stock as it sees Activision Blizzard well-positioned for success in 2021 and, more importantly, beyond. If the price jumps above $100, the next target could be around $110, while the first sign of the trend reversal could be if the price falls below the $80 support.

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