Aleksander Peterc, an analyst from Bernstein, maintained the Hold rating on UBISOFT Entertainment (0NVL – Research Report). The associated price target remains the same with €10.10.
Aleksander Peterc has given his Hold rating due to a combination of factors surrounding Ubisoft’s recent strategic deal with Tencent Holdings. The transaction involves Tencent acquiring a 25% stake in Ubisoft’s key franchises, which provides a significant cash injection of €1.16 billion. This move is intended to bolster Ubisoft’s financial position and support its ongoing transformation efforts. However, the lack of disclosed revenue or profitability metrics for the carve-out and the remaining Ubisoft operations makes it challenging to assess the full impact on shareholders.
While the deal provides temporary relief from potential covenant breaches and benefits bondholders, the long-term effects on equity holders remain uncertain. The transaction allows Ubisoft to avoid immediate debt restructuring, but the unclear implications for shareholder value contribute to the Hold rating. Peterc’s assessment reflects a cautious outlook, considering both the potential benefits and the unresolved questions regarding the company’s future financial performance.
In another report released yesterday, TD Cowen also reiterated a Hold rating on the stock with a €14.00 price target.
0NVL’s price has also changed moderately for the past six months – from EUR9.976 to EUR12.657, which is a 26.87% increase.