Analyst Atul Goyal of Jefferies maintained a Sell rating on Square Enix Holdings Co (SQNXF – Research Report), with a price target of Yen4,370.00.
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Atul Goyal has given his Sell rating due to a combination of factors affecting Square Enix Holdings Co. One of the primary reasons is the noticeable decline in earnings, with the company’s third-quarter operating profit falling 31% year-over-year, which was slightly below consensus expectations. This underperformance highlights a broader structural downturn across its various gaming segments, including mobile, MMO, and console games.
Despite this decline in performance, the company’s valuation remains at a historically high level, which Goyal believes is unsustainable given the current trends. As a result, he has adjusted estimates to reflect the ongoing challenges in the digital entertainment business, which has led to a reduction in the price target. Consequently, Goyal suggests considering investments in alternative gaming companies such as Nintendo, Capcom, Sony, Konami, and Bandai, given their more promising outlooks.