Embracer Group (Buy, TP: SEK160.00) - Approaching several milestones
We reiterate our BUY and have raised our target price to SEK160 (155) to reflect the slight increase in our 2022/23e revenue and adj. EBIT. The strong sales growth (Q3: 16% organic growth YOY in Games, with no major releases); stable back catalogue; solid mobile growth momentum; and large pipeline of AAA releases provide us with good conviction on the growth story. Moreover, the FCF profile should be strengthened by the consolidation of Asmodee from Q1, and we believe the 2022/23e EV/EBIT of 9x offers an attractive entry point.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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