Ubisoft Entertainment (OTC:UBSFF, EPA:UBI)'s investment appeal is “compelling at current levels”, according to analysts at Wedbush, who repeated an ‘outperform’ rating ahead of interim financial results on Thursday.
Key talking points come Thursday will be the upcoming game slate – with investors keen to see confirmation that the schedule of 10 ‘top’ titles targeted in the financial year is on track.
The game studio’s side deal with Microsoft for Activision games streaming rights (designed by Microsoft to appease antitrust scrutiny) will be another key focus, as investors will be looking for guidance on the monetization strategy and, specifically, how soon the arrangement will deliver to the bottom line.
It tees Ubisoft up to perform, should the next investors update go smoothly.
“We hope to get additional details on Thursday, potentially including the size of the one-off payment to Microsoft and the company’s initial plans for monetizing the cloud gaming rights it will receive,” Wedbush analyst Michael Pachter said in a note.
“With all of that said, execution issues and game delays have the potential to pop up again this week and over the next several months, particularly with multiple release dates yet to be finalized.
He added: “If Ubisoft can maintain the ten-game slate narrative on Thursday, we would expect the shares to react positively.”
Wedbush is predicting Ubisoft’s second quarter bookings at €360 million, versus company guidance of €350 million, whilst its forecast for the quarter’s operating income was pitched at €40 million. The broker meanwhile sees the full year figures at €2.1 billion of bookings and €400 million of operating income.
Wedbush’s ‘Outperform’ rating comes with a €34.50 price target, suggesting significant upside to the Paris-headquartered game studio’s prevailing price of around €26.60.