Ubisoft Entertainment SA: Risk Reward Update

Research evidence excerpt

Ubisoft Entertainment SA: Risk Reward Update

UpdateM

RiskRisk RewardReward– Ubisoft- UbisoftEntertainmentEntertainmentSA (UBIP.PA) SA (UBIP.PA)

Implementation of "Creative Houses" and cash allocation are key to risk/reward

PRICE TARGET €5.10 EQUAL-WEIGHT THESIS

We value Ubisoft using a DCF model, in which we assume a 12.3% WACC and 2% perpetual ▪Ubisoft’s strategic review led to a

growth rate. franchise-focused structure, including the

creation of "Creative Houses", alongside a €5.40

€1.16bn Tencent investment for ~25% in a

Consensus Price Target Distribution €3.50 €12.00 new subsidiary housing key IPs,

MS PT

strengthening the balance sheet whileSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates Ubisoft retains control.

▪Execution on releases continues to be

relatively weak, with Star Wars and

RISK REWARD CHART XDefiant disappointments in FY25.

▪Management's >€200m cost-saving target

represents an opportunity; our

EUR

€10.80€10.80(+103.08%)€10.80(+103.08%)(+103.08%) benchmarking shows Ubisoft is less

productive than peers and the target is

10 plausible.

▪Over the long run, Ubisoft is culturally

and technologically well placed to benefit

7.5 from AI, although we expect platform

companies to be first-line beneficiaries.

€5.32€5.32€5.32 €5.10€5.10(-4.10%)€5.10(-4.10%)(-4.10%) 5

Consensus Rating Distribution

14% Overweight

2.5

€3.20€3.20(-39.83%)€3.20(-39.83%)(-39.83%) 43% Equal-weight

43% Underweight

0 MS Rating

MAY '25 NOV '25 MAY '26 MAY '27

Source: Refinitiv, Morgan Stanley Research

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research Risk Reward Themes

Self-help: Positive

View descriptions of Risk Rewards Themes here

BULL CASE €10.80 BASE CASE €5.10 BEAR CASE €3.20