Investing.com – Japanese Video Game Veteran Konami Corporation (TYO:) this week, two brokerages turned bullish on the company's shares, citing strong growth for the company's mobile sports games and the possibility of upcoming remakes of its classic titles.
Jefferies upgraded the stock to “buy” from “hold” and raised its price target to 12,160 yen from 9,540 yen, implying an 11% upside from current levels.
Meanwhile, Bernstein initiated coverage on Konami with an outperform rating and a target price of ¥12,900.
Both brokerages cited the strength of Konami's mobile game eFootball, which initially struggled after going free-to-play from 2022 to 2023 but saw a resurgence in player numbers and ratings after a strong update in 2024.
The upcoming UEFA Euro 2024 is also expected to provide a boost for football.
Konami also has other popular sports games such as Pro Baseball Spirits, which have given it a strong position in its core Japanese market and protected it from competition from Chinese entrants.
Konami's remakes of legacy franchises, primarily Silent Hill 2 and Metal Gear Solid 3: Snake Eater, are also expected to slightly boost revenue in the second half of 2024. Bernstein said the two titles are considered low-risk, medium-reward endeavors.
Jeffries said future growth will depend mainly on Konami's mobile gaming business, with the sports angle giving the company a niche market.
Konami beat expectations in profits for the fiscal year ended March, driven mainly by an increase in the number of mobile gamers, and although the company gave a somewhat conservative outlook for next year, analysts still have a generally favorable view of the stock.
