On Thursday, UBS downgraded NEXON Co., Ltd (3659:JP) (OTC: NEXOF) stock from Buy to Neutral and lowered the price target to JPY3,090 from JPY3,260.
The firm anticipates a decline in the company's performance on both a quarter-over-quarter and year-over-year basis in the upcoming quarters. This expected decrease in performance is seen as a potential pressure on the share price.
The UBS analyst noted that while there's still potential for NEXON's performance to exceed market consensus and company guidance, the overall outlook suggests a weakening trend.
The analyst pointed out that compared to other large-cap companies like Nintendo, Capcom, and Bandai Namco, NEXON has fewer long-term investors to stabilize its share price.
The firm highlighted that NEXON's upcoming Capital Markets Briefing, scheduled for September 3, could influence its share price. The briefing is significant as it will include the company's first medium-term plan, which could alter the current perspective on its trajectory.
NEXON, a global video game company, is facing a critical period where its strategic decisions and announcements during the Capital Markets Briefing may have a considerable impact on investor sentiment and stock performance. The market will be looking closely at the medium-term plan's content to gauge the company's future direction.
Investors and market watchers are advised to pay attention to the details emerging from the September 3 briefing, as it could provide new information that may affect the company's valuation and stock performance.
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