Goldman Sachs bucks the bullish analyst trend on ATVI
U.S. stocks are mixed this afternoon, with the Dow pacing for a weekly loss as investors brace for Hurricane Irma's weekend landfall in Florida. Goldman Sachs put three online entertainment stocks in the spotlight today when the brokerage firm initiated coverage on video game titans Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), and Take Two Interactive Software Inc (NASDAQ:TTWO). Here's a quick look at how the analyst attention is moving shares of ATVI, EA, and TTWO.
A Rare "Neutral" Note for Activision Blizzard Stock
Goldman Sachs initiated coverage on Activision Blizzard with a "neutral" rating and set its price target at $65. ATVI shares are off 0.6% at $65.47 -- nearly flat with Goldman's target, but not too far off from last Thursday's record high of $66.58.
The internet gaming stock has gained 81.3% this year, guided higher by support at its 10-week moving average. Activision stock's steady uptrend has been rewarded with predominantly bullish analyst attention, with 17 "buy" or better ratings compared to only one "sell" rating.
Electronic Arts Stock Added to Goldman's Conviction List
Electronic Arts stock is off 0.3% to trade at $118.56, after Goldman Sachs started coverage with a "buy" rating and named the software stock to its Americas Conviction list. The brokerage firm also set its price target on EA to $136 -- well above last Thursday's record high of $122.79.
Electronic Arts stock has climbed roughly 48% over the past year, extending a longer-term uptrend dating back to 2013. Near-term options traders, however, are favoring puts over calls, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.49 -- in the 80th percentile of its annual range.
TTWO Touches Second Consecutive Record High
Also scoring a new "buy" rating from Goldman Sachs is Take Two Interactive Software, with the stock up 0.2% at $99.72, after hitting a record high of $100.59 earlier. Today marks TTWO's second consecutive record high, with the shares gaining steady ground in the wake of an early August bull gap. Goldman Sachs also set its price target for the software stock at $118 -- in uncharted territory.
Now up more than 133% year-over-year, TTWO has rewarded options traders by consistently exceeding volatility expectations. The stock's Schaeffer's Volatility Scorecard (SVS) stands at 91, which means TTWO has a strong tendency to make bigger moves on the charts than its options have priced in.