Activision Blizzard, Inc. (NASDAQ:ATVI) — This large-cap growth stock results from the merger of home entertainment software company Activision and Vivendi Games. The merger resulted in making what was a U.S.-focused producer of game software into a worldwide developer and producer of interactive entertainment products.
Standard & Poor’s upgraded ATVI stock following second-quarter results that exceeded analysts’ expectations. Activision Blizzard reported Q2 earnings of 54 cents vs. a Capital IQ estimate of 42 cents. Thus S&P increased the earnings per share estimate for 2016 to $1.95 from $1.83 and increased 2017 to $2.16 from $2.11.
In February of this year, the company acquired King Digital, best known for its Candy Crush games, with nearly 500 million monthly active users of its mobile-focused apps.
The excellent Q2 earnings were aided by the King Digital acquisition.
S&P has a 4-star “buy” rating on this stock, with a 12-month price objective of $52, raised from $42.
Technically ATVI stock is in a powerful bull market. On July 1, the stock broke from a very bullish cup-and-handle formation. Following the breakout the stock consolidated on the support line at $39.50 and the rising 50-day moving average, now at $40.69.
Buying has been relatively strong in the last 13 sessions, and MACD is on a strong buy signal. This stock has a history of higher breaks, followed by shallow pullbacks. But this stock now enjoys high momentum, and if it breaks Friday’s high at $43.10, go for it at the market.
Otherwise, try to buy ATVI at $42, with a price target of $51 for a proposed short-term trading objective of over 20%.
