Activision Blizzard postponed the release of its popular World of Warcraft video game series sending its shares down 5.3% on Friday. The video game maker said that World of Warcraft: Shadowlands, which was originally slated for October 27 launch, will now come out “later this year.”
Activision Blizzard (ATVI) said that the delay was caused by slowed development work as employees had to work-from-home during the COVID-19 pandemic. The company disclosed that the game remains in the “beta testing phase.” Activision Blizzard said that it doesn’t the postponement of the release to have any material impact on its 2020 financial results.
“The anticipation and demand for Shadowlands is the highest it’s ever been for a World of Warcraft expansion, and it is important for us to deliver an experience that meets our highest expectations and those of our players,” World of Warcraft executive producer John Hight said. “With that in mind, we made the decision to do what’s right for the game and take the extra time, and we think players will enjoy this expansion even more as a result of the additional work.” (See ATVI stock analysis on TipRanks)
Stifel Nicolaus analyst Drew Crum reiterated Buy rating on the stock as he views the video game delay as just a timing issue. In a note to investors, Crum said on October 2 that even if he removes the Warcraft game from his model, estimates for fiscal 2020 would still be higher than the company’s guidance. Therefore, he suggests that any related weakness in the stock can be seen as buying opportunity.
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 22 Buy, 1 Hold and 1 Sell. With shares up nearly 32% year-to-date, the average price target of $94.67 implies further upside potential of about 20.9% to current levels.
The post Activision Delays Key Video Game Release; Stifel Says Buy appeared first on TipRanks Financial Blog.