Ubisoft: Deutsche Bank downgrades stock

(CercleFinance.com) - On Thursday Deutsche Bank downgraded Ubisoft shares to 'hold' (from 'buy'), with a target price slashed from E24 to E15 (cp: E9.
3, -18.5%).

In a reaction note, the broker points out that last night, the video games developer reduced its forecasts for 2024/2025 (ending next March).

While the consensus previously expercted annual net bookings of E2.4bn, the company lowered its target to E1.95bn, down 16% y-o-y.

In comparison, Ubisoft had initially set itself a target of "solid growth" for the year.

Regarding results, the company now expects EBIT at around breakeven, instead of about E400m, with FCF of around zero, rather than 'positive'.

The warning is harsher than we expected, reacted Deutsche Bank analysts this morning.

It comes after the weaker-than-expected sales of 'Star Wars Outlaws', but above all after the postponement by three months of the release of 'Assassin's Creed Shadows', now scheduled for 15 February, which will push back a large part of sales into fiscal 2025/2026, they explained.

While a warning was widely expected (the stock is already down 30% since the release of Outlaws), the delay of AC Shadows is yet another disappointment, Deutshe Bank concludes.


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