Activision Blizzard (ATVI - Get Report) shares were up 2.6% to $46.72 in trading Monday after the company was added to Wedbush's best ideas list thanks to mobile growth in China and a new "Call of Duty" esports league.
Wedbush said it believes that even with a flattish performance for "Call of Duty" sales, Activision will outperform its full-year earnings guidance thanks to mobile strength and accretion from its acquisition of King Digital Entertainment.
Wedbush expects earnings per share of $2.40 for the year, well ahead of Wall Street's guidance for earnings of $2.10. The firm also expects revenue of $6.7 billion for the year vs. consensus estimates of $6.4 billion.
"Activision Blizzard is well-positioned to deliver significant outperformance in 2019 and outsized growth in 2020," Wedbush analyst Michael Pachter wrote. "Upcoming catalysts may include: Upcoming game announcements and launches, continued digital revenue growth, growth in esports viewership, contribution from King advertising, quarterly results, and guidance."
The firm believes a $3 EPS is possible for 2020 if Activision can achieve $200 million in growth for "Call of Duty:Mobile" as well as solid performances from its other titles. But even if the company does not achieve a $3 EPS, Pachter said that the perception of that possibility could lift the share price on its own.
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