Wells Fargo upgrades Activision Blizzard to Overweight with $95 price target

As previously reported, Wells Fargo analyst Brian Fitzgerald upgraded Activision Blizzard (ATVI) to Overweight from Equal Weight with a $95 price target. Given recent headlines surrounding the Microsoft (MSFT)-Activision Blizzard deal, the analyst is revisiting his valuation of the latter in a "no deal" scenario. Fitzgerald conservatively applies a 13.5-times multiple to consensus 2023 EBIT and account for an incremental $3B of cash on the balance sheet, arriving at a "breakup price" of $76. The analyst believes the market is undervaluing Activision relative to both outcomes — deal or no deal.