Ubisoft: Oddo no longer a buyer; cuts target price
(CercleFinance.com) - Vivendi yesterday announced the sale of its entire stake in Ubisoft.
After a remarkable stockmarket performance, broker Oddo has downgraded its rating on the Ubisoft stock to Neutral (vs. Buy), with a lower target price of 60 euros (against 75 euros).
The deflation of speculative appeal around Ubisoft no longer enables us to justify the stock's current valuation multiples (globally in line with the average of US competitors, EA, Activision and Take-Two, even though they have revenues that are three times higher, and are twice as profitable), Oddo says in its daily equity report.
This withdrawal by Vivendi marks the end of a war waged against the Guillemot family since October 2015. The media giant has decided to make a big capital gain (1.2 billion euros before tax) rather than try to take control of the company, whose market capitalisation now reaches 7.7 billion euros, the broker adds.
Under this agreement with Vivendi, Ubisoft directors have confirmed their financial targets for the years ending March 2018 (sales growth of 12% to 1,640 million euros and underlying OP growth of 14% to 270 million euros) and March 2019 (sales growth of 28% to 2,100 million euros and underlying OP growth of 63% to 440 million euros).
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
After a remarkable stockmarket performance, broker Oddo has downgraded its rating on the Ubisoft stock to Neutral (vs. Buy), with a lower target price of 60 euros (against 75 euros).
The deflation of speculative appeal around Ubisoft no longer enables us to justify the stock's current valuation multiples (globally in line with the average of US competitors, EA, Activision and Take-Two, even though they have revenues that are three times higher, and are twice as profitable), Oddo says in its daily equity report.
This withdrawal by Vivendi marks the end of a war waged against the Guillemot family since October 2015. The media giant has decided to make a big capital gain (1.2 billion euros before tax) rather than try to take control of the company, whose market capitalisation now reaches 7.7 billion euros, the broker adds.
Under this agreement with Vivendi, Ubisoft directors have confirmed their financial targets for the years ending March 2018 (sales growth of 12% to 1,640 million euros and underlying OP growth of 14% to 270 million euros) and March 2019 (sales growth of 28% to 2,100 million euros and underlying OP growth of 63% to 440 million euros).
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.