Berenberg has raised its rating on shares of Frontier Developments PLC (LON:FDEV: LN) (OTC: FRRDF) from Hold to Buy, while also increasing the price target to GBP3.30, up from GBP3.00. The upgrade follows the company's announcement of its upcoming titles, which the firm believes strengthens the company's position.
Frontier Developments, known for its creative management simulation (CMS) games, recently revealed that its fiscal year 2025 title will be Planet Coaster 2, and the fiscal year 2026 game will be based on the Jurassic World intellectual property (IP). Berenberg cited these future releases as key factors in the decision to upgrade the stock, noting that both titles have established audiences and have historically delivered strong returns for the company.
The firm's analysis suggests that these developments present a more secure outlook for Frontier's stock. With the anticipation of successful launches for the announced titles, Berenberg sees a potential for significant growth in the company's share price. The analyst described a scenario where the company could see approximately 100% upside to its current share price if their expectations are met.
Frontier Developments has a track record of success with its previous titles in these franchises, which contributes to Berenberg's positive outlook. The company's strategic focus on proven franchises is expected to continue yielding favorable results, as reflected in the upgraded rating and price target.
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