Spring is here, and with it comes a great opportunity to invest in gaming stocks. According to Kepler Cheuvreux’s stock analyst Rasmus Engberg, who covers companies in the gaming sector, the market is gradually improving after a period of overinvestment, oversupply, low economic growth, and inflation.
Engberg states, “We are soon back to a balanced market.” He emphasizes the importance of being selective when investing in gaming stocks, advising against buying a mix of companies or investing in laggards without thorough research.
Regarding Embracer, a gaming conglomerate, Engberg notes that they reported better-than-expected results in the latest earnings season. However, Kepler Cheuvreux recommends holding the stock as expectations were already adjusted before the report. The market reacted positively to Embracer’s structural changes, particularly the spin-off and IPO of board game company Asmodee, which significantly improved Embracer’s financial position. Engberg suggests that more confirmation of positive developments is needed before upgrading the stock to a buy recommendation, especially with two major game releases planned for this year.
On the spin-off of Asmodee from Embracer, Kepler Cheuvreux advises buying the stock. Engberg highlights the growth and profitability of the board game market, as well as Asmodee’s unique acquisition model, as compelling reasons to invest.
MTG, a mobile gaming company, is one of Kepler Cheuvreux’s top picks in the gaming sector. In their latest quarterly report, MTG exceeded expectations, and a major acquisition was announced. The acquisition of the popular online game “Raid: Shadow Legends” from an Australian developer, Plarium, is expected to double MTG’s earnings and cash flow without the need for additional capital injection. The deal was deemed strategically sound, further strengthening MTG’s position in the market.
In conclusion, the gaming sector presents promising investment opportunities, but careful consideration and selective investing are crucial. Embracer, Asmodee, and MTG are highlighted as companies with growth potential and strategic advantages worth exploring for investors looking to capitalize on the evolving gaming industry.