Activision Blizzard (ATVI) - Get Activision Blizzard, Inc. Report climbed Wednesday after a Jefferies analyst said he was still bullish on the video game company just days after the Call of Duty publisher said it had reached an $18 million settlement with the U.S. Equal Employment Opportunity Commission.
Shares of the Santa Monica, Calif. company finished up 1.4% to $77.38.
Analyst Andrew Uerkwitz said in a note entitled "72 Reasons to be Bullish" that "one thing is clear — normalized earnings post major game launches are significantly higher than 2019 & 2020 EPS."
Uerkwitz, who has a buy rating and a $120 price target, said that "Diablo II Resurrected" launched to good review this past weekend, the first of an expected wave of content from Blizzard.
On Monday, Activision Blizzard, which also publishes World of Warcraft and Candy Crush said it had settled an EEOC lawsuit where the agency charged the company of subjecting female employees to sexual harassment, retaliation for complaining about harassment, as well as paying female employees less than male employees.
The company also "discriminated against employees due to their pregnancy," the complaint alleged.
"There is no place anywhere at our company for discrimination, harassment, or unequal treatment of any kind, and I am grateful to the employees who bravely shared their experiences," CEO CEO Bobby Kotick said in a statement.
Activision Blizzard said committed to creating an $18 million fund to compensate and make amends to eligible claimants.
"The recent settlement with the EEOC gives us comfort monetary damages will remain immaterial and worst-case scenarios are off the table," Uerkwitz said.
In July, the California Department of Fair Employment and Housing served the company with a lawsuit, alleging the company's "pervasive frat boy workplace culture" resulted in female employees being subjected to sexual harassment and being paid less than men.
Uerkwitz said he did not expect any near-term settlement with this case.
"Here we could see additional headline risk," he said. "We do worry about long-term impact on employee turnover at Blizzard -- thus we modeled more conservative bull cases."
Earlier this month, the Communications Workers of America filed unfair-labor-practices charges against the company, charging worker intimidation and union busting.
In August, J. Allen Brack the head of Blizzard Entertainment, stepped down from his position as president.