In online entertainment, MS still prefers music over video games
** Within online entertainment, Morgan Stanley continues to prefer music over video games, with the former being "dramatically undermonetised" and heading for a re-pricing cycle, and the latter having a generally bearish backdrop
** MS says Universal Music UMG.AS ("overweight") is well placed to capitalise on strong structural growth in music, with margin accretion and improving FCF conversion
** It however cuts UMG's PT by 6.5% to EUR 29, flagging the still uncertain timing around a subscription growth re-acceleration and looking for further colour on what the label sees as longer-term opportunities
** UMG holds a Capital Markets Day on Sept. 17
** Within gaming, it retains a relative preference for Ubisoft UBIP.PA ("equal-weight") over CD Projekt CDR.WA ("underweight") given the wide disparity in valuation
** "We see a large opportunity for Ubisoft as it attempts to pivot its business towards a higher quality business mix, but limited evidence of delivery," MS says, pointing to recent disappointing games performance
** It cuts Ubisoft's PT by 36.5% to EUR 20, implying good upside but seeing little short-term prospects of re-rating
Reporting by Piotr Lipinski
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
