Embracer (1K) | Buy | A split to focus on the key IPs

研报英文原文证据摘录

Embracer (1K) | Buy | A split to focus on the key IPs

Embracer Buy | Target Price: SEK86.00

Company description Management

Embracer is a gaming group active in both development and publishing as well as the Lars Wingefors, Chairman

distribution of PC-, console- and mobile games. Europe and North America are the Phil Rogers, CEO Müge Bouillon, CFO

largest markets. The company has spent several years developing nine AAA titles that

they plan to release during the coming three fiscal years, starting 2026/27. Post a Key shareholders

significant restructuring involving disposals and two spin-offs, the company now has a Free float 72.00% Lars Wingefors AB 19.72%

net cash position and the opportunity to generate meaningful cash flow. Savvy Gaming 7.39%

DNB Asset management 6.37%

Investment case Valuation methodology

n Looking forward, Embracer aims to release Metro 2039 this n We use a conservative 7x EV/EBITDA less capex 2027/28, a low

fiscal year, while Amazon will release the first new Tomb multiple that reflects the mixed history. This target price

Raider game in many years, in addition to two medium-sized implies c. SEK 86 per share and c. 6.5% cash flow yield for the

titles. In 2027/28, three larger titles are scheduled, in addition same year.

to a second, larger Tomb Raider game. n A DCF based on an 8% long-term EBITA margin and 8.85%

n The company is focused on righting many of the previous WACC suggests SEK 105 per share.

challenges by investing relatively more in its own IPs and less Risks to our rating

in externally developed games based on 3rd party IPs. In n Postponement/cancellation of key upcoming game releases,

addition, the company may continue to shed non-core assets. resulting in poor ROI and revenue generation.