Ubisoft: Solid Near-Term Execution but Rising Cost Base and Limited Visibility Keep Risk-Reward Balanced at Hold

TD Cowen analyst Doug Creutz reiterated a Hold rating on UBISOFT Entertainment today and set a price target of €5.00.

Doug Creutz has given his Hold rating due to a combination of factors related to Ubisoft’s near‑term performance and longer‑term cost outlook. FQ3 bookings modestly exceeded management’s preannouncement and Street expectations, driven mainly by strong Assassin’s Creed results and better‑than‑expected partnership revenues, while key live services like Rainbow Six Siege showed stabilizing user trends.

At the same time, the reiterated FY26 guidance points to a very large operating loss and substantial negative free cash flow, implying an unusually high cost base in the second half despite the absence of major AAA releases. Creutz highlights that normalized non‑IFRS expenses are projected to rise sharply, without a clear explanation from management, and this cost visibility issue leads him to cut his estimates and lower the price target, concluding that risk‑reward is balanced rather than compellingly positive, supporting a Hold stance.

In another report released yesterday, TipRanks – PerPlexity also reiterated a Hold rating on the stock with a €4.50 price target.