News
Activision shares rated ‘strong buy’ ahead of merger
Neil Long Jun 11 2008, 2:21pm
Comments (2)
Analyst raises expectations ahead of expected shareholder approval on July 8th
The latest Wedbush Morgan mailout has revealed raised estimates for the combined business’ income FY ’09 revenue to $3.70 billion – up significantly from $2.41 billion.
On July 8th, shareholders are expected to approve the deal, with Wedbush Morgan predicting that the merger will be officially closed by July 11th.
The research note adds: "It is important to note that our estimates contain little margin expansion, and only modest growth for the core publishing business and for World of Warcraft subscribers.”
“We expect core publishing to grow from pro forma $2.8 billion in calendar 2007 to around $3.7 billion in calendar 2009, or about 15 per cent CAGR.
We expect combined Starcraft and WoW subscribers to end 2009 at 13 million, up less than 30 per cent over 2007."
“Gross margins are up only 300 bps from the pro forma level for 2008, with greater contribution from a full year of WoW subscription revenues.”
“We are raising our rating to 'strong buy' from 'buy' and raising our price target to $45 from $35, based on 30x our calendar 2009 EPS estimate of $1.50. This is at the upper end of Activision's historical multiple range.”
Comments
“huh”
Posted by: ka0znrky - Jun 11, 4:33pm
I thought this had already taken place. These things take forever :( stupid red tape.
Hurry up and get with the merging so you can announce some kick ass new games ... plz :)
“Re: huh”
Posted by: Paul Cutts - Jun 13, 11:39am
Funny how trust works in these things
we trust blizzard and activision and this is basically a non-story because of that. They are very realistic with there predictions very solid int here business and both very well liked companies publically. everyone is glad they are merging except EA who are the video games equivelent of NID