CD Projekt slumps on lack of 'clear beat' after strong run into Q1 earnings

CD Projekt SA

29/05/2024 09:05

** Shares in CD Projekt  CDR.WA  slump 5.6%, having
initially risen 2.7%, after its Q1 earnings lacked a clear beat,
with no positive catalysts expected in the near future
    ** The Polish top game maker reports better-than-expected
net profit at PLN 100.1 mln ($25.5 mln), but analysts cast a
doubt on the beat's quality
    ** Erste Group's Piotr Bogusz attributes the beat mostly to
the recognition of an above-average low income tax
    ** Bogusz does not exclude profit taking as reason for the
price drop, "given the lack of a clear beat", and points to CD
Projekt shares' strong run
    ** By Tuesday's close, the shares gained 24.4% YTD, reaching
their highest level since late September, when it released a
Cyberpunk 2077 expansion
    ** Morgan Stanley cites "sizeable execution risk" to
management's long-term plans, and downgrade the stock to
"underweight"
    ** MS sees risks around timing of CD Projekt's next
releases, citing early stage of Witcher 4 game development with 
potential release date in 2026 and "no obvious catalysts in
between"

($1 = 3.9218 zlotys)

 (Reporting by Mateusz Rabiega and Anna Maria Nowak)
 ((Mateusz.rabiega@thomsonreuters.com; +48 58 769 67 57))