Investing.com-- Japanese videogaming veteran Konami Corp. (TYO:9766) saw two separate brokerages turn bullish on the stock this week, citing strong growth in the firm’s mobile sports games, as well as potential from upcoming remakes of its classic titles.
Jefferies upgraded the stock to Buy from Hold, and also raised their price target to 12,160 yen from 9,540 yen- representing an upside of 11% from current levels.
Separately, Bernstein initiated coverage of Konami at an Outperform rating, with a PT of 12,900 yen.
Both brokerages cited strength in Konami’s eFootball mobile game. While the game initially struggled after going free-to-play in 2022-2023, it saw a resurgence in players and ratings after a strong 2024 update.
The upcoming UEFA Euro 2024 tournament is also expected to provide a tailwind to the game.
Konami also has other popular sports games, such as Pro Baseball Spirits, which give it a unique niche in its core Japanese market, while also shielding it from competition from Chinese entrants.
Upcoming remakes of some of Konami’s legacy franchises- chiefly Silent Hill 2 and Metal Gear Solid 3: Snake Eater- are also set to drive earnings in the second half of 2024, albeit marginally. Bernstein said the two were considered as low-risk, medium-return endeavours.
Jefferies said that future growth was now pinned largely to Konami’s mobile game businesses, with the sports angle giving the company a niche.
Konami clocked stronger-than-expected earnings in the March quarter, fueled chiefly by increased users in its mobile games. While the firm did provide somewhat conservative guidance for the coming year, analysts were still largely positive on the stock.
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