Oppenheimer sees Activision standalone value in mid-$80s per share

After the U.K.’s Competition and Markets Authority said that it will block Microsoft’s (MSFT) acquisition of Activision Blizzard (ATVI) based on its potential harm to the emerging cloud gaming market, Oppenheimer analyst Martin Yang believes Activision will trade in a range of $65 to $101 per share on a standalone basis. The firm views a standalone value in the mid-$80s per share as an appropriate base case for investors. Opco sees upside to that price if Diablo 4 outperforms expectations in 2023 and 2024. Given that the Microsoft deal is still pending for more regulatory decisions, its rating on Activision remains Not Rated. Opco says Activision’s valuation premium over Electronic Arts (EA) and Take-Two (TTWO) is warranted given Activision’s "currently superior product momentum" across platforms, as well as potential strength from Diablo 4. The stock in premarket trading is down 9% to $79.05.