Nomura Upgrades Activision Blizzard, Bullish On 'WoW Classic' And 'Overwatch'

Activision Blizzard, Inc. (NASDAQ: ATVI) looks to have several things going for it from its past, with a new “World of Warcraft Classic,” and from the future with a strong move into mobile games, Nomura Instinet said Thursday in upgrading the stock.

The Analyst

Nomura Instinet’s Andrew Marok upgraded Activision Blizzard to Buy and boosted the target price from $49 to $64.

The Thesis

Marok said last month’s launch of "World of Warcraft Classic" has driven “strong, above-expectations engagement,” and "Overwatch" has added new features and a launch on Nintendo Switch.

“This provides a much more favorable backdrop heading into November’s BlizzCon, which we expect will see the reveal of a "World of Warcraft" expansion for 2020 release and at least one of "Diablo 4" (more likely) or "Overwatch 2," which are both in development,” he wrote in a note.

Marok also likes a positive initial review reception for the new "Modern Warfare" game launching next month, among other game-specific tailwinds he sees for the company.

In particular, "Call of Duty Mobile" has a significantly large potential market.

“Mobile is a clear emphasis for ATVI, and we think that further inroads here are too attractive to ignore," Marok wrote.

Price Action

Activision Blizzard's stock traded higher by 3% to $56.60 per share.

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Photo credit: Marco Verch, via Wikimedia Commons