U.S. Markets closed

Stifel Remains A Buyer Of Activision Blizzard Into Q4 Earnings Print

Wayne Duggan

Activision Blizzard, Inc. (NASDAQ: ATVI) shares are already down more than 26.5 percent so far in 2016. With the company set to report on February 11, is the selloff a sign of bad things to come or simply an excellent buying opportunity ahead of earnings? According to Stifel analyst Drew Crum, Activision Blizzard stock is currently a steal.

"The shares have lagged ytd (-21% vs. S&P 500 -8%), we think based on 1) uncertainties around the content strategy for the Destiny franchise in ’16 ; and 2) mid-cycle multiple compression as the industry approaches its 'perceived peak' (though we beg to differ on this point) ~ the former will likely be addressed with earnings, while the latter could linger," Crum explained in a new report.

Related Link: 'Credit Default Swap' Data Indicate Increasing Short-Term Market Risk

Overall, he believes the Buy-rated stock offers a compelling risk/reward at 15x 2016 EPS estimates.

Stifel is calling for the company to announce conservative 2016 EPS guidance of $1.50 and has reduced its own estimate from $1.60 to $1.53. In addition, Stifel expects Actvision Blizzard to reiterate its 30 percent accretion projections associated with its King Digital Entertainment PLC (NYSE: KING) acquisition, which the firm believes will close by the end of February.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for ATVI

Date Firm Action From To
Jan 2016 Credit Suisse Maintains Outperform
Nov 2015 KeyBanc Maintains Overweight
Nov 2015 Pacific Crest Maintains Overweight

View More Analyst Ratings for ATVI
View the Latest Analyst Ratings

See more from Benzinga

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.