With Microsoft's Activision Blizzard Merger Cleared, Is Electronic Arts Stock a Buy?
The $69 billion merger between Microsoft and Activision Blizzard is one big step closer to completion. Earlier this month, a federal judge in California struck down the Federal Trade Commission's attempt to block the deal ahead of its July 18 deadline. As a sign of confidence that it can close the deal, the two companies extended the acquisition contract's deadline to Oct. 18 to allow more time to win regulatory approval in the U.K., which has yet to give a thumbs up on the merger.
The potential completion of the Microsoft-Activision deal just became a catalyst for Electronic Arts (NASDAQ: EA). Shares of Take-Two Interactive and Electronic Arts were moving higher after the news. Here's why Electronic Arts stock looks particularly appealing right now.
EA trades at a substantial discount to Activision. While the latter currently trades at a price-to-sales (P/S) ratio of 9, EA's P/S ratio of 5 looks cheap. A buyout offer for EA would undoubtedly come at a substantial premium to its current share price.
Source Fool.com
Activision Blizzard Inc. Stock
Currently there is a rather positive sentiment for Activision Blizzard Inc. with 3 Buy predictions and 0 Sell predictions.
On the other hand, the target price of 89 € is below the current price of 89.7 € for Activision Blizzard Inc., so the potential is actually -0.78%.
