: New fees ‘unlocking engine for growth’ at Unity, analyst upgrades to a buy


Unity Software Inc. gained an analyst upgrade on Friday on the belief the company’s new game-developer fees will turn its game engine into a growth engine.

On Friday, B. of A. analyst Michael Funk upgraded Unity U, +1.71% to a buy from neutral, and hiked his price target to $56 from $46, because his analysis of the company’s new fee structure “implies improved monetization of the company’s industry leading mobile game creation engine,” which in turn, unlocks Unity’s “engine for growth.”

Unity shares closed up 1.7% at $36.32, for a 3.6% decline on the week, while the broader market sold off with the S&P 500 index SPX falling 1.2% Friday, for a weekly loss of 0.2%.

Of the 28 analysts who cover Unity, 19 have buy-grade ratings, seven have hold ratings, and two have sell ratings, along with an average price target of $47.15, according to FactSet data.

On Wednesday, Unity met with blowback after it announced in a Tuesday blog post it would charge more established game developers every time their game was downloaded.

One analyst considered it a “PR disaster,” but saw the upside in the new fees, while shares fell 5.5% Wednesday, and another 3% on Thursday.

Funk said he believes mobile ad spending has stabilized and that “known risks and execution issues are more than priced into the stock.”

This article was originally published by Marketwatch.com. Read the original article here.

Previous articleBanking: Ex-bank exec gets six months of home confinement and probation for Wells Fargo fake-account scandal
Next article: Chip-equipment stocks drop following reported TSMC setback, but analysts see buying opportunity


Please enter your comment!
Please enter your name here