UBS downgraded Playtika to Neutral from Buy with a price target of $8.50, down from $44, after resuming coverage of the name. As a mobile game operator, Playtika benefits from its live game operations and proprietary technology as well as scale on its direct to consumer platform, bypassing high app store fees at Apple and Google on 25%-30% of its portfolio, the analyst tells investors in a research note. However, the firm says ongoing declines in Playtika’s social casino games and UBS’s cautious stance on mobile gaming at large warrant a Neutral rating. Playtika faces geopolitical risk with operations in Israel, Belarus and Ukraine while controlling shareholder Yuzhu Shi’s power over corporate actions exposes the company to U.S. relations with China, adds UBS.
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