Optimism Builds Around Outperforming Activision Blizzard, EA

Morgan Stanley handed out fresh "overweight" ratings on Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc. (NASDAQ:EA)

Sep 23, 2016 at 10:13 AM
facebook twitter linkedin

Video game stocks are off to a fast start, after receiving some positive analyst attention. In particular, Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc. (NASDAQ:EA) are both higher on the latest round of brokerage notes from Morgan Stanley.

Starting with ATVI, the stock is no stranger to optimism within the analyst community. After all, 11 of 15 brokerages rate the shares a "buy" or better, compared to four "holds" and not a single "sell" opinion. This glass-half-full approach is being echoed at Morgan Stanley, which started coverage on ATVI with an "overweight" rating.

On the charts, Activision Blizzard, Inc. is down 0.2% at $44.43 at last check, but hit yet another record high of $45.12 yesterday -- helping make sense of the analyst optimism. Brokerage firms aren't the only ones with lofty expectations, either. Options traders have bought to open 7.54 ATVI calls for every put during the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The corresponding call/put volume ratio ranks in the high 84th percentile of its annual range.

Similarly, EA's 10-day ISE/CBOE/PHLX call/put volume ratio of 7.10 checks in just 4 percentage points from a 12-month peak, suggesting traders are more bullish than usual toward the shares. Plus, among the 15 covering analysts, there are 12 "buy" or better endorsements, compared to three "holds" and not one "sell" rating. Now included among the brokerage firms drinking the proverbial Kool-Aid on EA is Morgan Stanley, which assumed coverage with an "overweight" recommendation.

The bullish note has Electronic Arts Inc. 0.7% higher at $83.74. In fact, the video game stock earlier touched an all-time high of $84.50, and has advanced nearly 22% on a year-to-date basis.

Schaeffer's Expiration Week Countdown subscribers just made 153% GAINS on Electronic Arts (EA) calls and 100% GAINS on Activision Blizzard (ATVI) calls! Sign up now for a trial subscription.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1