Activision Blizzard NASDAQ:ATVI have been a strong performer for a long time now. They have recently appeared on Morgan Stanley’s list of 30 stocks to watch and have been reporting growth for a number of years now. This last quarter the company provided record revenue and their best Q1 results of all time.
Shares of the company raised 1.6 upon news that Morgan Stanley, led by analyst Brian Nowack, raised it’s bull price to $100. The firm also stuck to it’s overweight rating and $75 target at the moment. The largest factor of this is just how far infront of the average Activision Blizzard are with eSports
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Activision Blizzard – Driving eSports
eSports has been a growing sector for a long time now. Last year we wrote about the sector and it’s growing potential. Nowack and his team indicated that the companys Overwatch League has audiences two times larger than they anticipated. With this, revenues could be up to 1.4x larger than expected.
Estimates place half of all gamers watching eSports at least one hour per day. With Activision Blizzard exceeding these estimates, it stands very well for the companys future. This is particularly true when considering the fact that Nowack expects the company to launch a Call of Duty League by 2019. This is something that could already be considered in the pipeline due to reports that the new Call of Duty will be multiplayer only.
For better or worse, this puts a huge franchise in a perfect position to take advantage of a huge growing area. Call of Duty also has a much larger base audience than Overwatch due to the sheer popularity of the franchise.
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Assisting Regulations and More
A further assist, at least within the United States, came from a recent Supreme Court decision to allow sports gambling (source: Bezinga). Nowacks expectations is a bullish upside of $17m of gambling revenue in 2020 from eSports gambling.
All of this bodes well for a company that is also showing record revenue across all fronts. With arguably the strongest position in a future billion dollar sector of a growing industry, Activision Blizzard look like a company that is worth keeping an eye on.
