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Shares in Activision Blizzard hit a record high after UBS raised its price target for the stock almost 19 per cent based on the game maker’s prospects for 2017 and following strong fourth-quarter earnings.
Nasdaq-listed shares in the company rose as much as 1.1 per cent to $50.32 on Wednesday, their highest intraday level on record.
The jump came after UBS raised its 12-month target price for stock in the company by $12, to $57. UBS justified the rise based on strong performance from the competitive team-based first-person shooter Overwatch and more robust content from online action-role playing game Destiny, as well as positive outlook for the company’s Call of Duty series and improved potential of its toys-to-life Skylanders franchise on Nintendo’s new Switch console.
It also suggested remaining upside for Activision Blizzard based on ad revenue from its acquisition of King Digital, publisher of the popular Candy Crush puzzle games, as well as growth opportunities in e-sports and a recently announced consumer products division.
Wednesday’s closing price of $50.14 brings shares in Activision Blizzard up 39.7 per cent for the year to date, as the stock has enjoyed a sustained rally following a strong fourth-quarter earnings report.
Revenues rose 41 per cent during the company’s 2016 financial year, with UBS estimating diluted annual earnings per share of $2.21, up 66 per cent year on year after falling in 2015.