Bear Stearns upgraded Activision (ATVI) to outperform from peer perform, and raised its price target to $24.
Analyst Glen Reid says he is upgrading to outperform from peer perform, raising price target to $24 from $18, and raising fiscal year 2007 (March) earnings per share estimate to 88 cents from from 82 cents.
Reid believes Activision is poised for strong margin enhancement owing to its position heading into the next cycle. He believes an increase in margins will lead to an increase in Activision's multiple. He thinks the company is at a point in its growth where its proven franchises, premium pricing, and steady international expansion should yield solid gains in profitability. Its third quarter (December) features a solid lineup for the holiday, he says.