Nordic video games: Berenberg's top picks

Paradox Interactive AB (publ)

06/06/2019 07:47

** Berenberg initiates Nordic video games publishers THQ
Nordic  THQNb.ST  with "buy" (target price SEK 270) and Paradox
 PDXI.ST  with "hold" (target price SEK 140)
    ** The broker says that within Europe, the Nordics are a
hotbed for the video games companies
    ** THQ has quickly become one of the largest video game
companies in Europe
    ** The broker says that with its strong pipeline of games
and SEK 2 billion of net cash waiting to be deployed on M&A, the
outlook is positive
    ** Berenberg says Paradox operates one of the highest
quality models in its mid-cap video-gaming universe 
    ** About 80% of company's revenues come from back catalogue
digital sales and provide strong revenue visibility and support
the group's EBIT margins -- Paradox trades 60% above the sector
    ** "While the business certainly deserves a significant
premium, we lean on the side of caution because of the more
erratic performance of its new titles and poor player engagement
with its first new release of 2019," the broker says
    
    

 ((jagoda.darlak@tr.com))