Unexpected Q4 dynamics, but reassuring guide
Initial CY18 EPS guidance of $2.50 was comfortably ahead of expectations in the $2.20-2.30 range. This offsets a Q4 which, while ahead of consensus, fell short of our forecast and probably buy-side expectations due to higher investment across the businesses. Plans for new mobile releases later this year both within and outside King should be well-received and we expect consensus to move higher. We see a sub-20x CY19 multiple as highly attractive for a company with so many growth opportunities and reiterate our Overweight stance.Activision Blizzard is a global developer and publisher of interactive entertainment content and services. The company's segments are: Activision Publishing, Inc., which is a global developer and publisher of interactive software products and entertainment content, particularly for the console platform; Blizzard Entertainment, Inc., which is a global developer and publisher of interactive software products and entertainment content, particularly for the personal computers platform; and King Digital Entertainment, which is a global developer and publisher of interactive entertainment content and services, particularly for the mobile platform, including for Google Inc.'s Android and Apple Inc.'s iOS.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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