Shares in Ubisoft fell 20% on Thursday after the French video game maker warned on revenue and postponed the release of its game 'Skull and Bones', prompting analysts to cut their estimates and price targets.
A view of the Ubisoft Entertainment logo on a panel during a news conference at the company's headquarters in Saint-Mande, near Paris, France, September 8, 2022. REUTERS/Sarah Meyssonnierfell 20% on Thursday after the French video game maker warned on revenue and postponed the release of its game "Skull and Bones", prompting analysts to cut their estimates and price targets.
Several analysts noted that another negative factor was a shift in the video game industry towards mega-brands and away from small and mid-tier games. "We have felt for several years that Ubisoft was devoting far too much money towards non A-tier franchises "....Macro or not, there is still plenty of room for big performance if you have the right product...Ubisoft clearly needs to refocus its efforts," Cowen analysts wrote.
They reiterated their "market perform" rating on Ubisoft and cut their price target to 22 euros from 34 euros. Morningstar analysts cut their fair value estimate on Ubisoft to 35 euros from 60 euros "to account for the revenue drop, lower top-line growth, and potential further game delay"Reporting by Dominique Vidalon, Pitr Lipinski; editing by Benoit Van Overstraeten and Jason Neely
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