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.