Jefferies prefers game makers with known titles, recurring sales

Rovio Entertainment Oyj

31/01/2023 11:51

** Jefferies assumes coverage of European video game makers,
favouring "highly recognisable" IPs and operators with recurring
revenue models
    ** It says the video games sector's profitability has
remained stable during previous recessions but this dynamic may
break in the oncoming one, and sees metaverse as an opportunity
to developers
    ** "We steer away from high-ticket video game developers and
more towards low-ticket or free-to-play developers over the next
12 months," the broker says
    ** Jefferies ups Rovio  ROVIO.HE  to "buy" from "hold" as it
sees Angry Birds' high brand recognition boosting growth and
margins
    ** It upgrades CD Projekt  CDR.WA  to "buy" saying a
successful launch of Phantom Liberty expansion pack should
attract incremental demand for the Cyberpunk 2077 base game,
while positive news on the upcoming Witcher could drive
incremental capital into the stock
    ** The broker raises Team17  TM17.L  to "hold" from
"underperform" but says it needs a more granular disclosure from
the company before it can take a more active stance
    ** It downgrades Ubisoft  UBIP.PA  to "underperform" from
"buy" saying the stock is in the "early innings of a
multi-downgrade cycle"
    ** It cuts Frontier Developments  FDEV.L  to "hold" from
"buy" pending better visibility to potential Age of Sigmar
success
 (Reporting by Marta Serafinko)
 ((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))