Paradox Interactive (Buy, TP: SEK240.00) - 2025–2026e FCF story in sight
Q3 proved to be a fairly lacklustre event, but we believe investors are shifting focus towards material earnings and FCF improvements in 2025–2026. Continued capex reductions following cancelled projects together with a strong pipeline should drive a 2023–2026e FCF CAGR of 20%. We reiterate our BUY and SEK240 target price, with a 5% EBIT cut offset by our raised FCF.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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