Ubisoft Faces Bearish Outlook

Analysts have turned bearish on Ubisoft as the gaming giant’s shares slumped following disappointing financial guidance and delays in key game releases.

Ubisoft shares fell by more than 4% on Wednesday before an over 13% decline in Thursday’s session. Several investment banks downgraded their ratings for the company, citing execution risks and mounting competition in the gaming industry.

HSBC’s Downgrade

HSBC cut Ubisoft to Hold from Buy, slashing its price target to EUR10.80 from EUR32.00. The firm pointed to the poor reception of Star Wars Outlaws and delays to Assassin’s Creed Shadows as key factors.

Analysts noted, “Execution risks around extracting value show limited signs of easing,” adding that the company’s operational challenges remain unresolved despite past turnarounds. Doubts were expressed about how Ubisoft would address these issues, despite a planned operational review.

Deutsche Bank’s Position

Deutsche Bank also downgraded Ubisoft to Hold, lowering its price target to EUR15.00 from EUR24.00. The bank noted that Ubisoft’s FY25 net bookings guidance had been reduced to €1.95 billion, significantly down from prior expectations of €2.42 billion. The delay of Assassin’s Creed Shadows and the performance of Star Wars Outlaws were key reasons for the downgrade.

Analysts commented, “The delay to AC Shadows is incrementally disappointing,” adding that new competition from upcoming titles like Ghost of Yotei could pose further challenges.

Exane BNP Paribas’ Downgrade

Exane BNP Paribas followed suit, downgrading Ubisoft to Neutral from Outperform and cutting its price target to EUR14.50 from EUR32.00. The bank previously upgraded Ubisoft to Outperform a year ago, but stated that their thesis has not played out.

They expressed concerns about Ubisoft’s upcoming releases and reduced sales expectations for Star Wars Outlaws and Assassin’s Creed Shadows due to intensifying competition in 2025, including the highly anticipated release of GTA 6. Analysts mentioned, “We remain hopeful that AC Shadows can deliver, but we prefer to reduce unit estimates to 9m vs 10m.”