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Analysts Downgrade Activision Shares

Analyst Michael Pachter from Wedbush Morgan has removed Activision from the company’s "focus lists", claiming that no further near-term growth is expected of the company,...
Analyst Michael Pachter from Wedbush Morgan has removed Activision from the company’s "focus lists", claiming that no further near-term growth is expected of the company, despite a good performance since October. Pachter claims that the 40 percent growth recently experienced by the company may have come “a bit early”, and that, although the company’s stock still has a ‘buy’ rating, he expects sales results for the end of the year to be disappointing. Although it remains to be seen exactly how well Call of Duty: Finest Hour will fare, it is certainly true that the majority of the company’s major releases have been before the Christmas period. However, considering how many casualties the Christmas rush usually sees, it could be argued that this was a sound business decision on Activision’s part. Nevertheless, Pachter’s comments have been echoed to some degree by Boris Markovich of TerraNova Institutional, who has also downgraded the company’s rating this week to ‘neutral’ – with the comment that “the stock's valuation is getting ahead of company fundamentals.” TerraNova has also downgraded the rating for Electronic Arts, claiming that the company’s stock is fully valued, and further major growth is not expected in the short term.

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