- Analysts offered their views on Activision Blizzard, Inc (NASDAQ:ATVI) post Q1 FY22 results.
- Raymond James saw ATVI's Q1 results significantly below expectations, driven by continued weakness in Call of Duty and a low ebb of content in Blizzard.
- It continued to see sizable headwinds for Call of Duty through the rest of the year until the anticipated release of Modern Warfare II this winter, which could easily reverse the franchise's fortunes.
- Blizzard results continue to disappoint (with the MAU bleed becoming somewhat concerning). However, the segment could get a shot in the arm with the surprise reveal of Diablo: Immortal for PC launching in early June.
- King was a bright spot with in-game bookings holding up solidly and ad bookings growing well.
- ATVI was more transparent than usual in in-process titles, suggesting a solid roadmap, with Modern Warfare II, Warzone 2, and Warzone Mobile in the Activision segment; and Diablo: Immortal for PC and mobile (June 2022), World of Warcraft Classic and Modern expansions, and Overwatch 2 and Diablo IV.
- Baird did not change its ATVI rating or price target amid the proposed acquisition by Microsoft Corp (NASDAQ:MSFT).
- While Activision Blizzard's Q1 results were below its expectations, Baird attributed much of the "miss" to the continuing impact of disappointing sales of Call of Duty in Q4 and some delays in content launches in Q1, and macro factors to a lesser degree.
- Baird saw 2022's Call of Duty resume year-over-year growth in Q4, with the stacked Blizzard pipeline helping to drive overall revenue and earnings growth next year.
- Price Action: ATVI shares traded lower by 0.88% at $77.37 on the last check Tuesday.
- Photo via Wikimedia Commons
