Deutsche Bank Recommends Buy-Rated ATVI Over ERTS

Deutsche Bank says that it recommends Activision Blizzard, Inc. ATVI shares as the best way to play the interactive entertainment sector, since ~2/3rds of yearly profits come from Blizzard. “A|B had a strong holiday season driven by Call of Duty and WoW: Cataclysm,” Deutsche Bank writes. “Meanwhile, we remain sellers of Electronic Arts Inc. ERTS and estimates remain at risk, highlighted by a 4% sell-through decline in '10 vs. 10%-15% publishing rev growth in CY10. We think this could lead to a $75-$150mn rev shortfall in 2H of FY11 and ~$0.10 EPS impact in FY11.” Activision Blizzard closed Thursday at $12.04; Electronic Arts Inc. closed at $16.04.