UBS Financial upgraded Activision (ATVI ) to buy from neutral.
Analyst Mike Wallace says while Activision's stock has already had a solid run, he sees catalysts in both the short and long term to drive it even higher. Short term, he thinks the entertainment-software maker can beat its recently raised third-quarter guidance (to 67 cents earnings per share on $480 million in revenue), and/or raise its fourth-quarter guidance, due to strong catalog sales. Long term, he thinks Activision will have a big 2004, with titles such as Spiderman 2, Call of Duty (consoles), Doom III, Shrek 2, and many other video-game titles.
Wallace thinks there's lots of room for earnings upside in fiscal 2005 (Mar.). He sees 57 cents fiscal 2004 earnings per share; he raised the 80 cents fiscal 2005 earnings per share to 90 cents, and upped the $20 target to $25.