The firm is bullish on the digital gaming move away from units sold to a business model based on users, engagement and digital monetization.
Morgan Stanley also sees digital in-game offerings resulting in recurring and growing user bases, higher per-game engagement and additional monetization opportunities, the Fly added.
In February, the company closed its almost $6 billion acquisition of King Digital. The firm is positive on King's mobile advertising opportunity and expects it to add about $500 million and 34 cents to earnings per share by 2018.
Shares of Activision Blizzard were declining late this morning.
The Santa Monica, CA-based company is a developer and publisher of video games.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins.
The team believes its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: ATVI