Worries over the rising popularity of Epic Games "Fortnite" have sparked a $6.3 billion decline in Activision Blizzard's market value. But one Wall Street firm believes the competitor's title will not cannibalize the publisher's profits.
Jefferies reiterated its buy rating on Activision Blizzard shares, downplaying concerns gamers are fleeing to "Fortnite."
"We see a buying opportunity as Activision Blizzard shares have traded down ~11% in the past week on fears Epic's mega-hit Fortnite could siphon engagement & monetization away from games like Call of Duty, potentially pressuring near-term results," analyst Timothy O'Shea wrote in a Tuesday note to clients entitled "Buy the Dip; Fortnite Monetization Impact Overblown." "While our checks suggest Fortnite is indeed pulling some engagement away from Activision Blizzard, we think the monetization fears are overblown."