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Activision Blizzard downgraded by MKM on valuation

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MKM on Thursday lowered its rating on Activision Blizzard to neutral from buy, saying the company is fully valued given its growth prospects.

"We like the long-term story but a lot of good news appears priced in," analyst Eric Handler wrote in a note to clients.

"We find valuation stretched (even at an aggressive case EPS scenario). Furthermore, we believe investors are already pricing in a 2Q beat and raise quarter and may be jumping the gun on Activision's mobile advertising rollout for King Digital."

The company is scheduled to report second-quarter results on Aug. 4.