The analyst notes that the distributor of gaming software and multimedia products saw its fourth-quarter revenue decline by 10.4%, in line with expectations, weighed down by a sharp drop in console sales - primarily Sony's PS5, now in its sixth year of operation.

'Other more profitable product categories outperformed, particularly licensed merchandise. Combined with additional cost savings, the group anticipates a significant improvement in profitability for 2025/26', the analyst highlighted.

The recent share price weakness and expectations of an earnings recovery (driven by the release of GTA 6 in November, product diversification into higher-margin categories, cost-cutting measures, a favorable basis of comparison, and a consistently solid balance sheet) have prompted the rating upgrade.