Paradox Interactive (Buy, TP: SEK240.00) - Sector-leading FCF growth story
We believe the market is increasingly willing to look past a 2024 plagued by cancellations and postponements and focus on the core portfolio and return to earnings growth for 2025e. While we have lowered our 2025e EBIT by 5%, we have increased our 2025–2026e FCF by 5–8% to account for the improving capex profile. We reiterate our BUY and SEK240 target price ahead of the Q3 results.Paradox Interactive AB (publ) is a Sweden-based company engaged in the development and publishing of personal computer (PC)-based strategy games. The Company's portfolio includes PC franchises such as Europa Universalis, Crusader Kings, Victoria and the Hearts of Iron series, as well as titles on other platforms such as Lead and Gold: Gangs of the Wild West released on PlayStationNetwork for the PlayStation3 and Defenders of Ardania on iPad as well as PC. Paradox Interactive has offices in Umea and Stockholm, Sweden. Additionally, the Company works with a number of distributors worldwide and is present on several digital download portals. It owns numerous subsidiaries, among which is Triumph Studios.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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