Embracer Group (Buy, TP: SEK150.00) - Promise on the horizon
We reiterate our BUY and SEK150 target price ahead of the Q2 numbers for July–September (results due at 06:00 CET on 17 November). We expect sales to rise by 29% YOY (-10% organic for Games), driven by acquisitions and the back catalogue, and adj. EBIT to fall QOQ owing to the step-up in user acquisition spending in mobile. Releases in late Q2 seem to be doing well, and we are likely to see revenue spill-over in Q3e. We remain confident in the strong pipeline (c70% of this year’s games ‘completion value’ scheduled for Q4) and the solid full-year revenue-growth outlook.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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