Liberum hikes target price on Keywords Studios

(Sharecast News) - Analysts at Liberum hiked their target price on Keywords Studios from 1,825.0p to 2,450.0p, stating the long-term outlook for both the firm and the video games industry at large was looking "better than ever".
Liberum highlighted that a combination of organic growth and targeted mergers and acquisitions had delivered a compound annual growth rate in profits of more than 40% over the last few years and turned Keywords into a nearly £2.0bn equity value leader in the gaming services market.

"With the outlook for the sector looking better than ever, and large developers and publishers restructuring many of their supply agreements, we see no reason why KWS cannot continue to deliver the same playbook for the next three years," said the analysts, who also increased their 2020 full-year earnings per share forecasts by around 20%.

The analysts also upped their revenue forecasts for the current trading year from €355.0m to €369.0m, leading it to expect an underlying earnings result of around €66.0m and an adjusted pre-tax profit of roughly €47.0m.

Liberum added that following Keywords' €110.0m placing back in May, together with its €100.0m revolving credit facility, the group was "well-funded" to deliver on further mergers and acquisitions.