SUMO.L Share News (SUMO)

(Sharecast News) - Analysts at Shore Capital upgraded their stance on video games developer Sumo Group from 'hold' to 'buy' on Friday following a near 6% drop in the outfit's shares since they initiating coverage on the group on 20 May, noting hat it had created 17% upside potential to its fair value assessment of 159p per share."Based on this relationship and given our positive view on the group's fundamentals, we have decided to upgrade our recommendation from 'hold' to 'buy'," said Shore Cap.The broker also said it liked the group's low-risk third-party game development model, strong track record, financial visibility, plans to gradually increase exposure to own-IP titles and its content partnerships with a broad range of blue-chip clients, including Microsoft, Sega, Sony and Marvel."We were also encouraged by the recent news that the group it is developing two new titles for Apple's Arcade streaming platform - opening up the potential for it to capitalise on this new growth opportunity within the gaming market," added the analysts.Although Shore Cap expects Sumo to generate a "more limited three year EPS progression" than others operating within the sector, its analysts believe that factors highlighted "will drive attractive longer-term growth"."We also see the potential for strong underlying cash generation to fuel further acquisition activity - adding further impetus to organic momentum," concluded Shore Cap.