Shall We Play A Game? Upgrades For ATVI, THQI, ERTS

Kaufman Brothers analyst Todd Mitchell this morning raised his ratings on Activision Blizzard (ATVI), Electronic Arts (ERTS) and THQ (THQI), While Mitchell also is cutting estimates and price targets for the stocks, he thinks they are “oversold in a tough market.”

It’s not exactly a table-pounding buy; his notes advise against trying to “catch a falling knife,” but instead suggest investors ought to be ready to buy them when the economy settles down. Not a big surprise, then, that the reaction to the call is lukewarm.

  • For Activision Blizzard, Mitchell goes to Buy from Hold, while cutting his target to $17.50 from $19. He maintains a 2008 EPS estimate of 60 cents, but trims 2009 to 70 cents from 72 cents. He says that the Activision and Blizzard combination is “powerful,” and that “the stock is at a point where investors should begin to get constructive with the goal of putting new money to work as we signs of economic stability emerging.”
  • For Electronic Arts, his rating goes to Buy from Hold, but his estimate drops to $42.50 from $58. For the March 2009 fiscal year, his EPS estimate drops to $1.25 from $1.35; for ’10, he goes to $1.90 from $2.13. Despite the lower estimates, he contends the stock is oversold.

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