UBISOFT Entertainment, the Technology sector company, was revisited by a Wall Street analyst on November 21. Analyst Doug Creutz from TD Cowen reiterated a Hold rating on the stock and has a €9.00 price target.
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Doug Creutz has given his Hold rating due to a combination of factors that highlight both positive and challenging aspects of Ubisoft Entertainment’s current financial situation. The company managed to exceed its second-quarter guidance with bookings of €491 million, driven by higher partnership revenue, which was a positive surprise. However, despite this performance, there are concerns about the company’s increasingly opaque business model, which has led to a reduction in the price target from €14 to €9.
Creutz points out that the complexity of Ubisoft’s financial structure has made it difficult to interpret key metrics, even for accountants. The discrepancy between reported operating income and free cash flow, partly due to opaque working capital changes, adds to the uncertainty. This lack of transparency, coupled with the need for clearer segmentation of B2B and B2C revenue, suggests that while the company is performing well in some areas, the overall financial picture remains unclear, justifying a Hold rating.
In another report released on November 10, Deutsche Bank also maintained a Hold rating on the stock with a €8.00 price target.