SHB says time to buy Embracer ahead of Asmodee spin-off, sector revaluation

Embracer AB

13/01/2025 14:06

** Svenska Handelsbanken upgrades Swedish gaming company
Embracer  EMBRACb.ST  to short-term "buy" from "hold", says it
is time to buy stock ahead of Asmodee spin-off and sector
revaluation
    ** Stock up around 10% as of 1321 GMT
    ** Pareto Securities analyst Vincent Edholm pointed to
positive previews from video game critics of Embracer's biggest
title this year, "Kingdom Come: Deliverance II"
    ** SHB says that major AAA-game releases in 2025 should
drive console unit sales and foster positive sentiment 
    ** Aside from "Kingdom Come: Deliverance II", brokerage also
notes "Killing Floor 3" premiere this year
    ** Beyond Q3, the focus will be on Asmodee, which Embracer
plans to spin off by end-March
    ** In its sum-of-the parts valuation, SHB is determining a
fair value of SEK 45 per share for the group and SEK 16 per
share for Asmodee, leaving some SEK 29 per share for the rest of
the group
    ** Embracer is trading below pre-pandemic sector average, so
a multiple expansion of 20% could increase share value, says SHB
    ** Brokerage keeps its long-term "outperform" rating, raises
three-year PT to SEK 45 from SEK 43


 (Reporting by Vera Dvorakova)
 ((vera.dvorakova@thomsonreuters.com))