Downgrade: Here's How Analysts See Ubisoft Entertainment SA (EPA:UBI) Performing In The Near Term

The latest analyst coverage could presage a bad day for Ubisoft Entertainment SA (EPA:UBI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the 19 analysts covering Ubisoft Entertainment provided consensus estimates of €2.1b revenue in 2025, which would reflect an uneasy 8.4% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing €2.4b of revenue in 2025. The consensus view seems to have become more pessimistic on Ubisoft Entertainment, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Ubisoft Entertainment

Notably, the analysts have cut their price target 24% to €19.77, suggesting concerns around Ubisoft Entertainment's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 3.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.2% annually for the foreseeable future. It's pretty clear that Ubisoft Entertainment's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

There might be good reason for analyst bearishness towards Ubisoft Entertainment, like a weak balance sheet. For more information, you can click here to discover this and the 3 other risks we've identified.

You can also see our analysis of Ubisoft Entertainment's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.