Analysts turn bearish on Ubisoft as shares fall By Investing.com

Investing.com — Analysts turned bearish on Ubisoft as the gaming giant’s shares fell following disappointing financial guidance and delays in key game releases.

Shares of Ubisoft fell more than 4 percent on Wednesday, before falling more than 13 percent in Thursday’s session. Several investment banks have downgraded their ratings on the company, citing execution risks and increasing competition in the gaming industry.

HSBC cut Ubisoft to Hold from Buy, cutting its price target to €10.80 from €32.00.

The firm pointed out the poor reception of Star Wars Outlaws and delays for Assassin’s Creed Shadows as key factors.

“Execution risks related to value extraction show limited signs of easing,” HSBC analysts noted, adding that the company’s operational challenges remain unresolved despite earlier changes.

The firm has expressed doubts about how Ubisoft will approach them problems, despite a planned operational review.

Deutsche Bank also downgraded Ubisoft to Hold, lowering its price target to €15.00 from €24.00. The bank noted that Ubisoft’s FY25 net bookings guidance was cut to €1.95 billion, down significantly from previous expectations of €2.42 billion.

The delay of Assassin’s Creed Shadows and the weaker than anticipated performance of Star Wars Outlaws were the key reasons for the demotion.

“The delay for AC Shadows is more and more disappointing”, analysts wrote, adding that new competition from upcoming titles like Yotei’s ghost could present additional challenges.

Exane BNP Paribas (OTC: ) followed suit, downgrading Ubisoft to Neutral from Outperform and cutting its price target to €14.50 from €32.00.

“We upgraded Ubisoft to Outperform a year ago, but our thesis has not been completed,” the bank wrote.

The firm expressed concern about Ubisoft’s upcoming releases, lowering its sales expectations for Star Wars Outlaws and Assassin’s Creed Shadows due to intensifying competition in 2025, including the highly anticipated release of GTA 6. “We remain hopeful that AC Shadows can provide but we prefer to cut unit estimates to 9m from 10m,” analysts said.