BUZZ-More confidence needed on Ubisoft's ability to seize opportunities - MS
Reuters · 09/15 06:22
BUZZ-More confidence on Ubisoft's ability to seize opportunities - MS

** Morgan Stanley starts coverage of Ubisoft UBIP.PA at "equal-weight", seeking more confidence on the game maker's ability to seize opportunities

** "Ubisoft has sizeable opportunities on revenue ... and cost, and is culturally/technologically well placed for potential AI windfall" - MS

** Ubisoft seems to be "increasingly willing" to invest in third-party intellectual property like Avatar, Star Wars, MS says

** Such games could provide for a more solid back-catalogue contribution, a more predictable release cadence, and a more consistent earnings profile, it adds

** Other major areas of self-help include expanding geographical mix, particularly expansion into Asia, and increasing live services revenues, the broker says

** Additionally, MS sees mgmt's cost reduction target of 200 mln euros ($213 mln) as "plausible", and a tangible cost action as a key stock driver over the 18 months

** The above , Ubisoft's "recent track record is weak and the market is highly competitive, leaving us on the sidelines for ," MS says

** The Assassin's Creed maker remains committed to internally-generated effort around free-to-play games, while peers have been "more pragmatic" on M&A, while it is possible consumer tastes move away from its historical strength of vast open-world games

($1 = 0.9385 euros)

(Reporting by Piotr Lipinski)