All about 'picking the right game to play' before game makers' Q4 - Berenberg

Devolver Digital

05/10/2022 12:26

** Heading into what looks to be a volatile Q4, Berenberg
sees both positive and negative opportunities across its
coverage of video game players - a matter of "picking the right
game to play"
    ** The market remains soft, the broker says, noting however
some quarter-on-quarter sales improvement in Q3, which helps
stem the double-digit declines seen earlier in 2022
    ** Most of the quarter-on-quarter growth was driven by PC
and console sales, it notes, seeing it improving further   
    ** Embracer  EMBRACb.ST , Nacon  NACON.PA , Stillfront
 SFRG.ST  offer significant value if the outlook is maintained,
while Team17  TM17.L , tinyBuild  TBLD.L  offer best value given
their robust outlooks, it says, and keeps "buy" on these stocks 
    ** Berenberg also has a "buy" rating on Frontier
Developments  FDEV.L , Keywords Studios  KWS.L , Media and Games
 M8G.DE , Rovio  ROVIO.HE 
    ** Among "hold" rated players, it flags that Ubisoft
Entertainment's  UBIP.PA  spiralling downgrade cycle makes the
company unattractive, while Paradox  PDXI.ST  and CD Projekt
 CDR.WA  look most vulnerable
    ** The broker also maintains "hold" on Devolver  DEVO.L ,
Focus Entertainment  ALFOC.PA 
 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))