Embracer Group (Buy, TP: SEK100.00) - Slight cash-flow improvement likely
We have lowered our target price to SEK100 (105) to reflect a c5% cut to our adj. 2023/24e EBIT but reiterate our BUY ahead of the Q3 results (due at 06:00 CET on 16 February). We still expect H2, and especially Q4, to be an inflection point for cash flow supported by e.g. Tabletop and transformative platform deals. For 2023/24, Embracer expects to release four AAA games, starting with the long-awaited ‘Dead Island 2’ in Q1, likely supporting medium-term organic growth.Embracer Group AB, formerly THQ Nordic AB is a Sweden-based company engaged in the computer games development. The Company focuses on acquiring, developing and publishing personal computer (PC) and console games for Xbox and PlayStation platforms. The Company's game portfolio consists of owned franchises intellectual property (IP) and published titles, including Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory and Wreckfest, among others. It offers games through various distribution channels, including digital platforms, such as Steam, PlayStation Store and Xbox Live, as well as gaming conventions, and global retailers, such as Walmart, GameStop and Amazon. The Company has around 18 internal game development studios and operates in more than 40 countries.
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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