On Wednesday, Bernstein initiated coverage on Konami Holdings Corp. (9766:JP) (OTC: KNMCY), assigning the stock an Outperform rating and setting a price target of JPY12,900.00.
The firm highlighted the upcoming sports events, Euro 2024 and Copa America, as catalysts for increased engagement with Konami's eFootball platform during the typically slower summer months. The expectation is for a mid-single digit growth trajectory moving forward.
The analyst also pointed to the promising outlook for "Pro Baseball Spirits 2024-2025" and the potential impact of a new global mobile game, particularly in the wake of EA's decision to discontinue its baseball mobile game. These developments are seen to offer interesting opportunities for Konami in the gaming market.
Konami's strategy to produce remakes of popular titles such as "Silent Hill 2" and "MGS Delta" was characterized as low-risk and medium-reward.
While these remakes are not expected to transform Konami's financials on the scale of Capcom's successes, their manageable breakeven volumes suggest that they will perform well financially.
The price target set by Bernstein is based on a 23x forward earnings multiple for the fiscal year ending in March 2026. The firm's outlook indicates a belief in Konami's ability to leverage upcoming sports events and new game releases to drive growth and engagement in the near term.
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