UPDATE: UBS Investment Research Raises PT on Activision Blizzard Following Revenue/EPS Report

In a report published Friday, UBS Investment Research analyst Eric J. Sheridan reiterated a Buy rating on Activision Blizzard (NASDAQ: ATVI), and raised the price target from $17.00 to $21.00.

In the report, UBS Investment Research noted, “Activision delivered revs and EPS in line with its preliminary results (announced July 26), which had exceeded consensus estimates for revenues and EPS at the time. Despite the quarter, Activision's management maintained their cautious view (on competing titles, marketing & console cycle) for the Sept-Dec time period. On July 26, Activision announced that it reached an agreement to buy 429mm shares (and tax assets) from Vivendi for $5.83b in cash. To help fund this purchase, Activision announced that it planned to issue $4.6b of debt. Based on our estimates, this transaction will result in 22% accretion on 2014 EPS. Due to the introduction of leverage in Activision's business model, we introduce higher EV multiples to reflect Activision's new capital structure and potential returns.”

Activision Blizzard closed on Thursday at $18.20.