Handelsbanken has reiterated its buy recommendation for MTG following the company's presentation at the bank's Small/Mid Cap seminar.
The bank highlighted management's confidence in outperforming market growth and the reconfirmation of guidance for 5-8 percent organic revenue growth by 2026. A potential IPO of PlaySimple India is seen as a catalyst that could accelerate the pace of acquisitions.
'The stock has recovered in recent months but still looks cheap at an EV/EBIT and EV/EBITDA of around 5x (2027e)', the analysts wrote, while noting that the company is expected to generate free cash flow equivalent to 14-17 percent of its market capitalization over the 2027-2028 period.
Modern Times Group MTG AB is a Sweden-based entertainment company. The Company operates in two segments: Esport and Gaming. The Esport segment is made up of ESL, Dreamhack and MTG VC-fund’s investments in esport related companies. Through ESL and Dreamhack,the Company operates national and international tournaments as well as grassroots amatuer cups, leagues and festivals. The Gaming segment is made up of InnoGames, Kongregate and MTG VC-fund’s investment in gaming-related companies. InnoGames is publisher of mobile and on-line games. InnoGames’ complete portfolio encompasses seven live games and several mobile titles in production. InnoGames is focused on the free-to-play segment and provides players with a cross-platform experience on PC and mobile devices. Kongregate is mobile game publisher and developer. The Company operates worldwide.
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