Focus Home: Berenberg initiates with 'buy', sees potential earnings increase

Pullup Entertainment SA

10/12/2020 08:52

** Berenberg initiates the coverage of Focus Home
Interactive  ALFOC.PA  with a "buy" rating, citing potential
earnings increase as the French video games developer is moving
up the sector value chain
    ** "FHM aims to transform its business model by becoming
more of a developer of its own games," the broker says
    ** It says nine game releases in the second half of the year
versus six in H1 make the estimates in the short-term look very
conservative
    ** It adds that 2023 estimates earnings could be more than
50% higher if gross margins reach 40%, which the broker sees as
achievable as FHM intends to grow its catalogue of owned content
    ** Berenberg also expects the "acquisition journey" to
begin, citing the recent appointments of a new chairman, CEO and
CFO with significant M&A experience
    ** Stock up ~12% at 54.4 euros at 08:50 GMT; up 132.3% YTD
including session's gains


 ((juliette.portala@thomsonreuters.com))