(This story is for CNBC PRO subscribers only.)
Video game companies are having a great year thanks to the coronavirus pandemic — and analysts are taking note.
Deutsche Bank analysts upgraded their rating on Activision Blizzard's stock to a "buy" from "hold," claiming in a note Tuesday that major publishers "have further upside" thanks to a positive earnings outlook and "stay-at-home behaviors" linked to the Covid-19 pandemic.
In Activision Blizzard's case, Deutsche said it was upgrading the stock due to a "positive sector outlook," "material upside to consensus estimates" on earnings and a "strong content pipeline over the next two years."
The analysts added that Call of Duty: Warzone — which utilizes the free-to-play battle royale genre popularized by Fortnite — "represents a fundamental positive shift for the 17 year old franchise."
They also raised their stock price targets for the sector.