Oppenheimer Says Latest 'Call Of Duty' Game Positions Activision Blizzard For E-Sports Push

Activision Blizzard, Inc. ATVI released the newest, highly anticipated installment of its popular franchise "Call of Duty: Black Ops 4" last week.

The first-person shooter game became the best-selling full game on Playstation and digital game on Xbox on its first day on the market. 

The Analyst

Oppenheimer analyst Andrew Uerkwitz reiterated an Outperform rating on Activision Blizzard with an $87 price target.

The Thesis

The video game maker took a risk with the latest "Call of Duty" game by potentially altering the franchise trajectory, Uerkwitz said in a Tuesday note. (See his track record here.) 

“We believe this title is purpose-built to engage gamers well beyond 2019 due to upcoming updates/new content across game modes. Moreover, we see it as a foundation for a much bigger push into e-sports.”

Activision Blizzard has entered the popular battle royale gaming landscape, as "Black Ops 4" features a battle royale mode and lacks a single-player campaign. The game features traditional and zombie modes, offering plenty of customizability for the gamer, Uerkwitz said.

“We believe it opens up opportunities for regular updates and special events across Blackout, multiplayer or zombie modes. We believe ATVI intends for gamers to stay engaged with 'BO4' for several years as the game evolves and adapts to new trends," the analyst said. 

Oppenheimer expects Activision Blizzard to outperform its peers in the industry’s shift to digital distribution and new models.

The company retains strong brand recognition and historically popular franchises that incite engagement and reduce earnings volatility between products, Uerkwitz said.

“Also, we believe there is significant upside from its emerging e-sports, media content and advertising initiatives.”

Price Action

Activision Blizzard shares were down 0.42 percent at $78.40 at the time of publication Wednesday. 

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"Call of Duty: Black Ops 4" screenshot courtesy of Activision Blizzard.