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

Shares of Activision Blizzard, Inc. ATVI are up more than 13 percent on Wednesday trading, after the company beat earnings and revenue estimates on Tuesday evening.

Related Link: Activision Blizzard Beats Q2 Expectations, Shares Surge

The Santa Monica, California-based company posted earnings of $0.13 per share on revenue of $759 million, ahead of guidance (which called for earnings of $0.07 per share on sales of $650 million) and the Street’s consensus estimate of $0.09 per share and $666.02 million.

However, it is not only Activision Blizzard’s stock that is reacting to earnings. Shares of Take-Two Interactive Software, Inc. TTWO are up roughly 1.7 percent on Wednesday afternoon, while Electronic Arts Inc. EA’s stock is up almost 5 percent. And, according to Wedbush analyst Michael Pachter and Brean analyst Todd Mitchell, these two stocks are surging “on Activision earnings strength sympathy.”

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

As per the note, 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 experts “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.”

Having said this, Wedbush reiterates a Neutral rating and $26.00 price target on shares of Take-Two.