Shares of video game makers got a boost Friday, after Goldman Sachs said the sector was entering the “halcyon days of gaming’s digital age.” Analyst Christopher Merwin started coverage of the sector with an attractive rating: “The video game publishers are in the midst of a renaissance, as they transition to more predictable, higher-margin, cash-generative growth stories,” Merwin wrote in a note to clients. “The digital shift could add up to 5 [percentage] points of margin in the next 3 years.” Electronics Arts Inc. was Merwin’s favorite of the sector, as he initiated the stock with a buy rating and price target of $136, and added it to Goldman’s Americas conviction list. He also started Take-Two Interactive Software Inc. at buy with a $118 stock price target, Activision Blizzard Inc. at neutral with a $65 price target and Zynga Inc. at neutral with a $3.90 price target. Shares of Electronic Arts slipped 0.1% in morning trade, while Take-Two edged up 0.1%, Activision eased 0.8% and Zynga gained 1.1%. For context, the S&P 500 ticked down 0.1%.
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