3 Videogame Stocks One Analyst Says Will Thrive This Year

Each of these 3 videogame stocks could see double-digit upside this year. Here’s why. 

There has been a fair amount of buzz around videogame stocks so far this year. 

New consoles from Microsoft (NASDAQ: MSFT) and Sony (NYSE: SNE) have both said that their next generation gaming consoles will be released at the end of this year, just in time for the 2020 holiday shopping season.

With new consoles, comes a fresh catalyst for videogame stocks and Piper Sandler analyst Michael Olson says three stocks in the sector will dominate this year. 

Olson has an Overweight rating on Activision Blizzard (NASDAQ: ATVI), Electronic Arts (NASDAQ: EA), and Take-Two Interactive (NASDAQ: TTWO).

For Take-Two, Olson says the stock could jump to $141 over the next twelve months, or nearly 11%. 

“We see potential for EPS upside [for the December quarter] driven by Outer Worlds, Borderlands 3 and GTA Online,” Olson wrote regarding Take-Two. “Investors are likely eyeing a jump-start to Red Dead Online, but in the near-term, we look for strong continued monetization in GTA Online.”

Moving on to EA, Olson has a $124 price target on the stock – 11% higher than the stock’s price as of this writing.

While EA shares are currently down around 6% in after-hours trading following its earnings releasee,  it did report adjusted revenue of $1.98 billion for its fiscal third-quarter, beating analysts’ estimates of $1.97 billion. However, its guidance for revenue for the current quarter came in just below consensus estimates of $1.2 billion at $1.152 billion.

“It was an excellent third quarter, with our new games and live services delighting more players around the world,” said CEO Andrew Wilson in the company’s earnings release. 

Still, Olson says EA could see “potential upside driven by Star Wars Jedi: Fallen Order.”

EA said on its earnings call that the single-player Star Wars adventure game is on track to hit 10 million unit sales.

“Sales of Star Wars: Jedi Fallen Order significantly beat our expectations,” said CFO Blake Jorgensen, who noted that EA had originally predicted the game to sell between 6 and 8 million units for the fiscal year. 

As for Activision Blizzard, Piper Sandler has a price target of $69 on the stock – 13% higher than the current price. 

“We believe Activision is best positioned among its peers, potentially through the next two years, as the installed base of consoles ramps,” Olson wrote. 

Olson expects Activision will see a benefit from better monetization of its Call of Duty: Modern Warfare game this year compared to its Call of Duty: Black Ops game, while also citing the strong performance of its Call of Duty Mobile smartphone game. 

Instinet analyst Andrew Marok is bullish on Activision as well, recently rating the stock a Buy and issuing a $70 price target.

“We think ATVI is well positioned over the medium term, with pipeline visibility and mobile opportunities providing runway for share price appreciation,” Marok wrote in a note. “Even with what we believe are conservative assumptions, we see a compelling case for share price appreciation.”

Trending Ideas

Featured Stocks On The Move

Daily Rundown

Top 3 Stocks in Leading Sectors
  • 3 Electric Power Stocks To Buy Now

    Featured Content Hawaiian Electric Industries, Inc. (HE) Hawaiian Electric Industries, Inc. is a holding company that provides electric utility services and financial services in Hawaii. Through its subsidiaries, it supplies... Read More

  • 3 Bank Stocks To Buy Now

    Featured Content Comerica Incorporated (CMA) Comerica Incorporated is a financial services company headquartered in Dallas, Texas, offering a range of banking products and services, including commercial and retail banking, wealth... Read More

  • 3 Machinery Stocks To Buy Now

    Featured Content Alta Equipment Group Inc. (ALTG) Alta Equipment Group Inc. is an integrated equipment dealership platform in the United States, operating through three segments: Material Handling, Construction Equipment, and... Read More

  • 3 Silver Stocks To Buy Now

    Featured Content Gatos Silver, Inc. (GATO) Gatos Silver, Inc. is a precious metals mining company primarily focused on silver and zinc production. Its flagship Cerro Los Gatos mine in Mexico... Read More

  • 3 Metal Production Stocks To Buy Now

    Featured Content Century Aluminum Company (CENX) Century Aluminum Company is a primary aluminum producer, with operations that include the production of high-purity, low-carbon aluminum used in automotive, aerospace, and industrial... Read More

  • 3 Medical Drug Stocks To Buy Now

    Featured Content Teva Pharmaceutical Industries Limited (TEVA) Teva Pharmaceutical Industries Limited is a global pharmaceutical company specializing in generic and specialty medicines. The company provides a wide range of treatments... Read More

  • 3 Paper Product Stocks To Buy Now

    Featured Content AptarGroup Inc. (ATR) AptarGroup Inc. is a global leader in providing innovative dispensing and packaging solutions, serving diverse industries like beauty, personal care, and pharmaceuticals. They focus on... Read More

  • 3 Restaurant Stocks To Buy Now

    Featured Content Brinker International, Inc. (EAT) Brinker International, Inc. operates well-known restaurant brands such as Chili’s Grill & Bar and Maggiano’s Little Italy. The company is a leader in the... Read More

  • 3 Investment Brokerage Stocks To Buy Now

    Featured Content Robinhood Markets, Inc. (HOOD) Robinhood Markets, Inc. is a financial services company known for its commission-free trading platform, which allows users to trade stocks, options, cryptocurrencies, and ETFs.... Read More

  • 3 Shipping Stocks To Buy Now

    Featured Content ZIM Integrated Shipping Services Ltd. (ZIM) ZIM Integrated Shipping Services Ltd. is a global container shipping company that provides cargo transportation services worldwide. The company operates a modern... Read More

  • 3 Mining Stocks To Buy Now

    Featured Content Perpetua Resources Corp. (PPTA) Perpetua Resources Corp. is a mining company focused on the exploration and redevelopment of the Stibnite Gold Project in Idaho, which is one of... Read More

  • 3 Airline Stocks To Buy Now

    Featured Content General Electric Company (GE) General Electric Company is a global industrial conglomerate with operations spanning sectors such as aviation, healthcare, power, and renewable energy. GE is known for... Read More