Activision Blizzard (ATVI) - Get Report shares climbed in Wednesday trading after BMO Capital Markets upgraded the game company's stock to outperform from market perform and hiked its target price to $60 from $43.

"We are increasing our target owing to two main factors. First, we are increasing our 2020 earnings-per-share estimate to $3 from $2.50, based on a higher conviction level that investments in core games like Call of Duty and World of Warcraft will generate an improvement in performance," BMO analyst Gerrick Johnson said in a Sept. 4 note.

"Second, we are increasing the valuation multiple to 20x from 17x. As investors get more comfortable with the turnaround story and as new catalysts develop, we believe the company's valuation multiple will expand."

The shares were trading up 4.3% to $53.27 at last check.

Earlier this year, Activision Blizzard said it was restructuring to refocus its efforts on core properties like Call of Duty, Overwatch, Warcraft, Hearthstone, and Diablo, Johnson noted. 

"Early signs are encouraging, with initiatives in World of Warcraft, Hearthstone, and Call of Duty showing progress," he wrote. "In fact, we think the shares could potentially expand higher than our target price with a more robust expansion of multiple in the near term if investors see better signs of progress in its turnaround."

He also says the company will benefit from "the inevitable deceleration" of interest in Fortnite.

ATVI, "with over 80% of its console games competing in the shooter genre, was impacted more than others by the rise of Fortnite," he wrote.

"Going forward, ATVI should benefit from lapsed players coming back to games like Call of Duty or Overwatch as excitement around Fortnite cools. Also, the idea that Fortnite exposed a new generation of gamers (including many females) to the shooter genre could be an added tailwind for ATVI."

His new $60 target price represents about 13% upside from the stock's current level, including today's rise. The average target price for Activision is $53.97.

The stock has traded between a 52-week low of $39.85 in February and record high of $84.68 in October.