Analysts Grow Bearish on Ubisoft as Shares Decline

Analysts have adopted a bearish outlook on Ubisoft as the company’s stock price plummeted following disappointing financial forecasts and delays in significant game launches.

Ubisoft’s shares dropped over 4% on Wednesday, followed by a steep decline of more than 13% on Thursday. Several investment banks have lowered their ratings for the company, highlighting execution risks and increasing competition within the gaming sector.

HSBC downgraded Ubisoft from Buy to Hold, cutting its price target from EUR 32.00 to EUR 10.80. The firm cited the lackluster reception of “Star Wars Outlaws” and the delay of “Assassin’s Creed Shadows” as pivotal factors in their decision. HSBC analysts remarked that “execution risks around extracting value show limited signs of easing,” indicating that the company’s operational difficulties persist despite previous recovery efforts. They expressed skepticism about Ubisoft’s strategies to tackle these challenges, even with a planned operational review on the horizon.

Similarly, Deutsche Bank also downgraded Ubisoft to Hold and revised its price target down from EUR 24.00 to EUR 15.00. The bank pointed out a reduction in Ubisoft’s FY25 net bookings guidance to EUR 1.95 billion, a marked decrease from earlier estimates of EUR 2.42 billion. The downgrading was influenced by the postponement of “Assassin’s Creed Shadows” and the weaker-than-expected performance of “Star Wars Outlaws.” Analysts commented that the delay of “AC Shadows” is particularly disappointing and expressed concerns about new competition from upcoming titles like “Ghost of Yotei.”

Exane BNP Paribas has also followed suit by downgrading Ubisoft to Neutral from Outperform, decreasing its price target from EUR 32.00 to EUR 14.50. The bank conveyed that their previous upgrade to Outperform, made a year ago, has not materialized as expected. They raised concerns about Ubisoft’s forthcoming releases and lowered sales projections for both “Star Wars Outlaws” and “Assassin’s Creed Shadows” in light of escalating competition expected in 2025, including the highly anticipated launch of GTA 6. The analysts expressed cautious optimism that “AC Shadows” may still deliver, but chose to reduce their unit projections from 10 million to 9 million.