Benchmark analysts have reiterated their Buy rating and $90 price target on Activision Blizzard (ATVI), labeling it a top pick in the EDM sector. They believe investors will be rewarded with an approximate 21% upside to Microsoft’s $95 bid or an approximate 15% upside to their FY23 $90 price target if the deal is abandoned. ATVI is delivering on a meaningful product cycle that should drive record growth over the medium term, with a near-term growth catalyst from the Diablo IV launch. Benchmark is cautious that ATVI’s F2Q23 operating income will be impacted by marketing and software amortization related to the launch. They also believe Microsoft could be successful on appeal with the Competition Appeal Tribunal after the UK blocked the acquisition.
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