(News Bulletin 247) – The financial intermediary Stifel has revised its target price downwards to 35 euros, against 50 euros previously.
“Press the ‘pause’ button”. This is how Stifel titles his note on the video game publisher Ubisoft published this Thursday. A metaphorical way to signify that the time has come to switch from “buying” to “holding” on value.
“The basis for our advisory downgrade reflects a combination of factors, including what we consider to be overambitious forecasts for the financial year. [clos en mars] 2023, an execution risk around the program [de lancement de jeux, NDLR] of the company in the medium and long term, and reduced expectations in terms of redemption”, explains the investment bank.
As a result, Stifel also lowered its price target to 35 euros from 50 euros previously.
Tencent lowers takeover hypothesis
The bank explains that it is less confident about the company’s short-term prospects, in particular because of the headwinds linked to the macroeconomics. Stifel also points out that since the financial year ended in June 2020, the company has lowered its objectives at least in part during the last three fiscal years.
The increase in Tencent’s stake in the capital “reduces the probability of an imminent takeover, in our opinion”, also estimates the bank, while this eventuality had, according to it, supported the course recently. Until the pact between Tencent and the Guillemots, therefore.
At the beginning of the month, the Chinese group joined forces with the founding family of Ubisoft, taking 49.99% of the capital of Guillemot Brothers, the Guillemot holding company, for 400 million euros. Above all, Tencent also obtained authorization from Ubisoft’s board of directors to more than double its current direct stake and thus increase it from 4.5% to 9.99%.
On the Paris Stock Exchange, the Ubisoft title suffered from the deterioration of Stifel, yielding 5% around 4:40 p.m. and accusing one of the ten largest drops in the SBF 120, which for its part fell by 1.45%.