MKM Says Buy Activision Blizzard (ATVI)

MKM Partners has a $15 price target and a Buy rating on Activision Blizzard, Inc. ATVI after it reported earnings after the bell yesterday. In a note to clients, MKM writes, "We continue to view Activision as the best-in-class video games publisher following a better than expected 3Q10 and the rapidly approaching holiday releases of Call of Duty: Black Ops and World of Warcraft: Cataclysm. Management took a more conservative approach to 4Q10 in its guidance, likely because of continued weakness in music and a cautious outlook for its second tier titles. However, we believe the sizable, global appeal of Activision's two biggest franchises (along with our positive retail checks) could produce upside relative to the company's outlook. As such, we are maintaining our 4Q10 EPS estimate of $0.50 for the quarter compared to Activision's $0.47 guidance." Shares of ATVI gained 18 cents yesterday to close at $11.63, a gain of 1.6%.