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The Zacks Analyst Blog Highlights: Nintendo, Activision Blizzard, Capcom and Microsoft

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For Immediate Release

Chicago, IL – November 2, 2020 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Nintendo Co. (NTDOY - Free Report) , Activision Blizzard, Inc. (ATVI - Free Report) , Capcom Co., Ltd. (CCOEY - Free Report) and Microsoft Corp. (MSFT - Free Report) .

Here are highlights from Friday’s Analyst Blog:

Coronavirus Continues to Boost Videogame Sales: 4 Winners

The video gaming industry has found a blessing in disguise in the coronavirus pandemic that is keeping people indoors most of the time. With not many options for entertainment except for streaming videos and music online, videogames have emerged as one of the biggest beneficiaries. And if the situation continues like this, this holiday season will witness a surge in videogame sales.

According to market research firm NDP Group, COVID-19 became a blessing in disguise for video game companies, with an increasing number of Americans shelling out on buying video games. The holiday season has always proved to be great for retailers, and videogame makers are likely to witness a record surge in sales this holiday season.

Videogame Sales Set to Soar This Holiday Season

NPD Group has forecast consumer spending on video games to touch $13.4 billion this holiday season. This suggests an increase of 24% from the previous year.

Gamers are mostly going to spend on console hardware, gamepads, headsets, mobile and post-launch console on both PC and console. This year has so far been great for videogame makers and if things continue to be like this. NPD projects overall consumer spending on videogames in the United States to surpass $20 billion this year.

Pandemic Benefiting Gaming Industry

According to the NPD Group’s 2020 Gamer Segmentation Report, Americans are now spending 14 hours on average per week versus 12 hours till 2018. The United States presently has 244 million video games, which has increased by 30 million over the past two years.

The firm predicts that a few console games will outperform competitors this holiday season particularly the PlayStation 5 and Xbox Series consoles. Also, the firm predicts that Nintendo Co.’s Switch will go on to become the hottest selling holiday gifting item.

Needless to say, videogames will continue to dominate the entertainment space at least this year or till the time a vaccine is out given that stepping out of the house bears the risk of spreading the virus. Moreover, with the recent spike in coronavirus cases, it is likely that outdoor entertainment will not resume anytime soon and video games will make up for that.

Our Choices

Given this sudden surge in sales and upbeat sentiment in the video gaming industry, it makes for an opportune time to invest in gaming stocks that are sure to gain in the near term.

Activision Blizzard, Inc. is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most-popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the e-sports concept.

The company’s expected earnings growth rate for the current year is 45.8%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. Activision Blizzard carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nintendo Co. is a worldwide leader in the creation of interactive entertainment. It manufactures and markets hardware and software for its popular home video game systems, including Nintendo 64 and Game Boy.

The company’s expected earnings growth rate for the current year is 29.3%. The Zacks Consensus Estimate for current-year earnings has improved 12.6% over the past 60 days. Nintendo has a Zacks Rank #1.

Capcom Co., Ltd.plans, develops, manufactures, sells and distributes consumer video games. Its operating segment consists of Digital Contents, Arcade Operations, Amusement Equipments and Other Businesses segments.

The company’s expected earnings growth rate for the current year is 29%. The Zacks Consensus Estimate for current-year earnings has improved 6% over the past 60 days. Capcom has a Zacks Rank #2.

Microsoft Corp. is one of the largest broad-based technology providers in the world. The company dominates the PC software market with more than 80% of the market share for operating systems. Besides, it is also one of the market leaders in PC and console games.

The company’s expected earnings growth rate for the current year is 13.7%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. Microsoft has a Zacks Rank #2.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit information about the performance numbers displayed in this press release.