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Wedbush Very Bullish on Activision

"…We are more bullish than ever about Activision as an investment," wrote Pachter in a note to investors. "We believe that the current share price presents a compelling entry point for Activision shares, and recommend that investors opportunistically add to positions."

Wedbush maintains a "strong buy" rating for Activision shares, which stood at $17.07 in midday trading.

Pachter's comments come after the recent monthly US figures from market researchers NPD Group, which revealed Activision's first two months of the current quarter alone generated $116 million, 39 percent higher than $84 million for the same two-month period a year prior.

Pachter said that this puts Activision on track to generate revenues of $250 million or greater. Wedbush effectively raised its quarterly estimate from $205 million to $250 million. Last year, Activision reported sales of $188 million for the comparable quarter.

In addition, Activision should benefit significantly from the European launch of the PlayStation 3 on March 23, according to Pachter. The publisher is set to launch Call of Duty 3, Tony Hawk's Project 8 and Marvel Ultimate Alliance in Europe this week. All games proved to be big sellers in North America.

Guitar Hero II for the PS2 also continues to be a top seller and with the impending release of the enhanced Guitar Hero II for Xbox 360, the franchise is likely to continue to generate significant sales. "We think that sales of [Guitar Hero II for Xbox 360] could substantially exceed street expectations," Pachter noted.

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