EIDOS PLC WATCH
SHARES RISE ON FTSE
Copyright 2002 www.ananova.com
[ February 13th 2002 ]
in Eidos PLC were higher by midmorning, reversing
an opening weakness, as a meeting between the
computer gamesmaker's management and analysts
at UBS Warburg led the broker to advise that the
recent sell-off is unjustified, dealers said.
follows recent talk that Eidos may be set to issue
a trading statement, and after Goldman Sachs this
morning cut its current year earnings expectations
to reflect possible product delays. But management
reiterated to UBS Warburg that it is happy with
current market estimates, suggesting a 2002 pretax
loss of £3.5 million.
that through its own studies it could find no
new company-specific reasons for the recent weakness.
It reiterated a 'buy' stance in a note to clients.
This follows concerns that the release of major
titles Deus Ex, Hitman 2 and Herdy Gerdy may slip
into 2003, from the planned March launch. These
specific titles each represent between 4-6% of
UBS's 2002 sales estimates.
Eidos management advised the broker that they
see no change to the release schedule from the
interim stage. All three titles are advertised
on Eidos' website with the release date of "early
2002", while trade magazine Computer Trade Weekly's
release calendar places Herdy Gerdy for a release
on Feb 22, the broker noted. Shares have also
been hit after Salt Lake, Eidos' Winter Olympics
franchise, failed to make much of an impact on
the UK sales charts.
said both it and management knew that Salt Lake
had not charted well in the UK at the end of January,
having been launched three weeks earlier. The
title, thought to be more popular in Germany,
only equates to 3% of UBS's sales forecast.
should already be aware that this Christmas has
been poor, with weak charting, delays and cancellations
affecting the bottom line, the broker advised.
But it believes Christmas 2002 has the potential
for a recovery in earnings due to the launch of
Tomb Raider for PS2 and a stronger underlying
portfolio of titles.
19.5 times 2003 earnings, Eidos is on a 30% discount
to leading US publishers, UBS noted. And while
the broker believes a discount is justified, this
is starting to offer some valuation upside given
the strength of the Tomb Raider franchise. Moreover,
it believes that sentiment on the shares should
be good this year, driven by underlying industry
growth and the likely success of the Tomb Raider
am, shares in Eidos were up 3-1/2 pence at 144,
having dipped as low as 140 in opening deals.