EA, Take-Two Ride Activision's Earnings To Gains

Shares of Activision Blizzard, Inc. (NASDAQ: ATVI) were up more than 12 percent on Wednesday after the company beat earnings and revenue estimates.

The company posted earnings of $0.13 per share on revenue of $759 million, ahead of guidance that called for earnings of $0.07 per share on sales of $650 million, as well as the Street’s consensus estimate of $0.09 per share and $666.02 million.

It's not just Activision Blizzard’s stock that is reacting.

Sympathy Moves

Shares of Take-Two Interactive Software, Inc. (NASDAQ: TTWO) were up more than 2.2 percent, while Electronic Arts Inc. (NASDAQ: EA)’s stock was up 5 percent. According to Wedbush analyst Michael Pachter and Brean analyst Todd Mitchell, these two stocks are surging “on Activision earnings strength sympathy.”

Related Link: Video Game Industry Outlook 'Still Blurry,' Credit Suisse Analysts Warn

Wedbush published a new report on Take-Two on Wednesday, previewing the company’s first-quarter (fiscal 2016) financial results, which will be announced after the market closes next Monday.

The firm is anticipating revenue of $350 million and EPS of $0.40, versus consensus of $354.03 million and $0.30, and guidance of $325 – $350 million and $0.25 – $0.35. The analysts are expecting substantial upside from the new release of Grand Theft Auto V “for the PC and digital momentum.”

Moreover, the analysts “expect management to pass-through Q1 upside to FY:16 guidance for revenue of $1,300 – 1,400 million and EPS of $0.75 – 1.00.”

Wedbush reiterated a Neutral rating and $26.00 price target on shares of Take-Two.