Activision Blizzard, Inc. (NASDAQ: ATVI) stock was plunging Friday after game developer Bungie announced it was ending its contract with Activision and would retain rights to the "Destiny" game franchise.
The split led KeyBanc Capital Markets to lower its price target for Activision Blizzard.
KeyBanc analyst Evan Wingren maintained an Overweight on Activision Blizzard and lowered the price target from $80 to $64.
The loss of "Destiny" will be a short-term revenue and earnings issue for Activision, Wingren said in a Thursday note.
KeyBanc reduced its estimates for both fiscal 2019 and 2020.
“Short-term concerns are valid; long-term opportunity remains unchanged,” the analyst said.
A joint statement from Activision and Bungie this week said Activision will “increase its focus on owned-IP and other projects,” but didn’t give a reason for Bungie taking over the "Destiny" franchise.
“By ending the relationship, (Activision) is implying that despite an impact to near-term earnings, it sees higher terminal value in deploying development resources elsewhere,” Wingren said.
Activision Blizzard was trading down 9.55 percent at $46.44 at the time of publication Friday.
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Photo courtesy of Activision Blizzard.
Latest Ratings for ATVI
|Jan 2019||Stephens & Co.||Initiates Coverage On||Overweight|
|Dec 2018||JP Morgan||Upgrades||Neutral||Overweight|
View More Analyst Ratings for ATVI
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