Photo courtesy of Activision

Video game maker Activision Blizzard, Inc. ATVI reported fourth-quarter results Thursday that lifted shares to a new 52-week high, while four Street analysts see further upside ahead.

The Activision Blizzard Analysts: Raymond James analyst Andrew Marok maintains an Outperform rating on Activision Blizzard's stock with a price target lifted from $109 to $120.

Needham analyst Laura Martin maintains a Buy rating on Activision Blizzard's stock with an unchanged $102 price target.

Morgan Stanley analyst Brian Nowak maintains an Overweight rating on Activision Blizzard's stock with a price target from $108 to $115.

KeyBanc Capital Markets analyst Tyler Parker maintains an Overweight rating on Activision Blizzard's stock with a price target lifted from $102 to $120.

RayJay Sees Strength In 2021, Beyond: Activision Blizzard's revenue rose 13% year-over-year to $3.05 billion versus the Street’s estimate of $2.83 billion, Marok said in a note.

Revenue from the Activision segment rose 16% to $1.66 billion; King revenue was up 15% at $577 million; and Blizzard’s segment revenue was down 3% at $579 million, the analyst said. 

The company’s core franchises, including Call of Duty, World of Warcraft and Candy Crush, all showed “robust” bookings growth in the quarter, he said.

Momentum should be sustained in 2021 and beyond ahead of multiple launches, including a potential remaster release this year and World of Warcraft mobile titles that are in advanced development, according to RayJay. 

Needham's 5 Key Takeaways: Activision’s earnings report is highlighted by five key takeaways, Martin said in a note.

They are: 

1. The company noted its games reach 400 million players in 190 countries.

2. Throughout 2020, the company had three game franchises that generated $1 billion in net bookings. Management guided toward two additional games hitting the $1-billion revenue milestone.

3. Activision expects to grow in 2021 despite difficult year-over-year comparisons.

4. Management will focus development efforts on its largest franchises with the objective of duplicating the CoD model of monetizing free-to-play games.

5. Warzone more than doubled its player base and generated a lot of interest in free premium trials.

Morgan Stanley's Reopening Concerns: Video games were one of several categories that saw a notable uptick in demand during the COVID-19 pandemic, as consumers were looking for more forms of entertainment at home.

Now that the reopening phase is very slowly starting to take place in some regions, it was "encouraging" to hear Activision's management say they are seeing momentum in reopening regions, Nowak said.

Ongoing demand in areas that are more advanced in the reopening process can be attributed to Activision's content and quality of its products, the analyst said.

Encouragingly, Activision's 2021 EPS outlook of $3.60 could be conservative, he said. 

"Given ATVI's historically pragmatic approach to forward guidance (having beaten their initial full year EPS guidance by 16% on average from '16-'19) we struggle to believe the company would have guided as aggressively as they did without a margin of safety on re-opening."

KeyBanc Says 2022 Looks Big': Activision's fourth-quarter report came in better than expected, and the company's outlook through 2022 "looks big," Parker said in a note.

Activision's 2021 bookings guidance was stronger than expected despite the absence of a new AAA game this year, the analyst said.

This suggests ongoing strength in the broader gaming market, but also momentum across Activision's portfolio, he said. 

Activision hinted at a "step-function change" in 2022 that will be driven by a WoW expansion, a ramp in Diablo Immortal and a potential Overwatch 2 release, Parker said. 

"ATVI's franchise strategy to expand offerings to more platforms and models is working, and we believe there are multiple opportunities in place to grow the business for years to come."

ATVI Price Action: Shares of Activision Blizzard hit a new 52-week high of $104.23 Friday. The stock gained 9.64% in Friday's session, closing at $101.61.