We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Did Video Game Stocks (ATVI, TCEHY, EA) Sink Today?
Read MoreHide Full Article
Shares of video game giants—including Activision Blizzard , Take Two Interactive (TTWO - Free Report) , and Electronic Arts (EA - Free Report) —sank on Monday after a bearish analyst report on the state of the industry.
Today’s cautionary take comes from Cowen. The investment banking firm downgraded several industry giants, including Take-Two and Activision, as well as Ubisoft Entertainment (UBSFY - Free Report) .
Shares of Call of Duty maker Activision Blizzard dropped by over 3%, while industry peer Electronic Arts stock fell by more than 1.50%. Shares of Take-Two Interactive, which makes NBA 2K and other big-name video game titles, tanked by over 4%.
Interestingly enough, Cowen’s note comes in contrast to other recent analyst coverage. Just last week, Barclays’ analyst Ryan Gee started coverage on four of the biggest video game companies. Gee gave Electronic Arts (EA - Free Report) an “Overweight” rating and a price target of $129 a share, which marked a roughly 7.42% upside to last week’s closing price.
Part of the reason for Gee’s initial bullish coverage is because he thinks EA’s Live Services’ revenues will grow over the next two years.
The analyst also initiated coverage of Take-Two Interactive with an “Overweight” rating and a $115 price target. Take-Two’s $115 per share price target marked a nearly 7.25% upside compared to Friday’s closing price of $107.23 a share. Gee noted that Take-Two is monetizing popular video games more effectively compared to its peers.
Gee also initiated coverage of video game powerhouse Activision Blizzard with an “Equal-Weight” rating along with a $65 a share price target, which marked a 2.77% upside to Friday’s closing price.
Still, despite these recent relatively bullish Barclays’ rating, shares of all four of these companies sunk on Monday.
Sales Projections
This downgrade and brief investor retreat comes just a few days before market research firm NPD Group is set to release its September video game sales report.
Stifel Nicolaus analyst Drew Crum expects that the Oct. 12 report will be very important for investors, as it includes some the industry’s biggest games—including NBA 2K18 and FIFA 18. The analyst projects overall video game sales will gain about 20%, while hardware and console sales will fall year-over-year.
Crum expects Activision Blizzard’s September sales will be $90 million—up from $20 million a year ago, due in large part to the recent release of Destiny 2. He projects Take Two Interactive’s sales will fall in the high-single digits to $100 million, while Electronic Arts sales are projected to gain slightly to hit approximately $80 million.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Why Did Video Game Stocks (ATVI, TCEHY, EA) Sink Today?
Shares of video game giants—including Activision Blizzard , Take Two Interactive (TTWO - Free Report) , and Electronic Arts (EA - Free Report) —sank on Monday after a bearish analyst report on the state of the industry.
Today’s cautionary take comes from Cowen. The investment banking firm downgraded several industry giants, including Take-Two and Activision, as well as Ubisoft Entertainment (UBSFY - Free Report) .
Shares of Call of Duty maker Activision Blizzard dropped by over 3%, while industry peer Electronic Arts stock fell by more than 1.50%. Shares of Take-Two Interactive, which makes NBA 2K and other big-name video game titles, tanked by over 4%.
Interestingly enough, Cowen’s note comes in contrast to other recent analyst coverage. Just last week, Barclays’ analyst Ryan Gee started coverage on four of the biggest video game companies. Gee gave Electronic Arts (EA - Free Report) an “Overweight” rating and a price target of $129 a share, which marked a roughly 7.42% upside to last week’s closing price.
Part of the reason for Gee’s initial bullish coverage is because he thinks EA’s Live Services’ revenues will grow over the next two years.
The analyst also initiated coverage of Take-Two Interactive with an “Overweight” rating and a $115 price target. Take-Two’s $115 per share price target marked a nearly 7.25% upside compared to Friday’s closing price of $107.23 a share. Gee noted that Take-Two is monetizing popular video games more effectively compared to its peers.
Gee also initiated coverage of video game powerhouse Activision Blizzard with an “Equal-Weight” rating along with a $65 a share price target, which marked a 2.77% upside to Friday’s closing price.
Still, despite these recent relatively bullish Barclays’ rating, shares of all four of these companies sunk on Monday.
Sales Projections
This downgrade and brief investor retreat comes just a few days before market research firm NPD Group is set to release its September video game sales report.
Stifel Nicolaus analyst Drew Crum expects that the Oct. 12 report will be very important for investors, as it includes some the industry’s biggest games—including NBA 2K18 and FIFA 18. The analyst projects overall video game sales will gain about 20%, while hardware and console sales will fall year-over-year.
Crum expects Activision Blizzard’s September sales will be $90 million—up from $20 million a year ago, due in large part to the recent release of Destiny 2. He projects Take Two Interactive’s sales will fall in the high-single digits to $100 million, while Electronic Arts sales are projected to gain slightly to hit approximately $80 million.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>