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By Maria Armental
Activision Blizzard Inc. was among the top performers on the S&P 500 on Friday with a gain of 9.4% to $ 101.39, following record 2020 results with more than $ 8 billion in revenue and $ 2 billion in profit and the optimistic tone from company executives for 2021 and beyond.
The last time the company’s stock traded at those levels was in early 1984, according to FactSet.
“We are entering 2021 with momentum in our largest franchises,” said COO Daniel Alegre in a conference call with analysts.
“We are just at the beginning of unlocking the full potential of our portfolio and we expect another sea change in financial performance in 2022 as we execute our portfolio,” he said.
The company behind game franchises like Call of Duty, Candy Crush, and World of Warcraft, has seen increased engagement as people stayed home during the coronavirus pandemic.
“But two things we saw, one is that in our most social titles, the commitment remained at a high level,” said Alegre. “Second, and I think more importantly, we see that for the franchises that we are executing our new franchise strategy on, especially Call of Duty and World of Warcraft, we see substantially more engagement than we had even when the regions reopen. ”
This year, Activision said it expects earnings to reach $ 2.83 per share, or $ 3.34 per share on an adjusted basis, on $ 8.23 billion in revenue.
That may be a conservative perspective, said MKM Partners analyst Eric Handler.
“With little, if anything, is taken into account in the numbers for Crash Bandicoot on the Run and Diablo: Immortal, plus an expectation of [Call of Duty] Premium income to decline YoY, guidance is likely to be viewed as conservative again, “Handler wrote on Friday.” Adding even more fuel to the fire, management seemed very confident about the growth prospects in 2022 and 2023 while also providing a bit of color in the incremental content drivers. ”
He raised the price target from $ 105 to $ 115.
Raymond James’ Andrew Marok and Crystal Liu raised their price target to $ 120 from $ 109, noting “a lot of clues to reach new players through mobile and free offerings and capitalize on strong demand for new titles planned in existing franchises “.
Write to Maria Armental at [email protected]
(END) Dow Jones Newswires
February 5, 2021 14:17 ET (19:17 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
