DnB Markets - Embracer Group (EMBRAC B) Embracer Group (Buy, TP: SEK38.00) - Stormy but in a better position

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DnB Markets

Martin Arnell

EUR 95.03 For Business Accounts Only

Embracer Group (Buy, TP: SEK38.00) - Stormy but in a better position

We have lowered our target price to SEK38 (43) after a 9% cut to our 2024/25e group EBIT (weaker than expected PC/Console delivery and near-term outlook), but reiterate our BUY as we expect better FCF and still see a high probability of a potential divestment, which should improve the balance sheet materially. We acknowledge the low investor confidence, but believe the company is in better shape after the restructuring.

16/02/2024 1 EN

Underlying

Embracer Group

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.

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SE0013121589 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Martin Arnell

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Embracer Group (Buy, TP: SEK38.00) - Stormy but in a better position

Embracer Group (Buy, TP: SEK42.00) - Spin-offs set to unlock value

Embracer Group (Buy, TP: SEK42.00) - Set to improve during the year

Embracer Group (Buy, TP: SEK45.00) - Looking past uneventful H1

Edda Wind (Buy, TP: NOK30.00) - Well positioned

Valuation and market update

Petrobras FPSO delays may hit service volumes but lengthen cycle

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