- Videogame stocks are lower today after Cowen goes Neutral across the board, seeing unrealistic 2018 expectations priced into shares.
- The firm cut Activision Blizzard (ATVI -3%), Take-Two Interactive (TTWO -3.8%) and Ubisoft (UBSFY +1.1%) to Market Perform, and reiterated its Neutral stance on Electronic Arts (EA -1.2%).
- Shares have been on a strong run in 2017 -- year-to-date, ATVI is up 70%, TTWO up 109.4%, UBSFY up 104%, EA +50.6% -- and Cowen notes that the Street seems to be pricing in 12-13% industry growth, "well above anything achieved in the last decade."
- Competition will be higher next year as well, with a packed slate of games vying for limited gamer attention.
- While it's still a believer in long-term attractiveness of the sector, there will be at least a 15-20% multiple compression as buy-side expectations dampen, Cowen says.
- Also moving: Zynga (NASDAQ:ZNGA), down 1.9%; Glu Mobile (NASDAQ:GLUU), down 2.7%.
- Now read: Take-Two: A Perfect Gaming Hedge?
Original article