Bernstein Eyes Capcom and Konami for Near-Term Growth

Bernstein's Top Videogame Picks

Bernstein has identified two Japanese videogame stocks, Capcom and Konami, with "Outperform" ratings, anticipating significant strength in the coming months. The firm's analysis focuses on developers with proven franchises and improving financial outlooks as key investment targets.

Analysis of Market Leaders

Each company presents unique catalysts for growth, positioning them for a strong performance based on idiosyncratic factors.

Capcom's Strong Portfolio

Capcom's fundamentals have strengthened while its valuation remains attractive. Strong sales from titles like Resident Evil Requiem, reaching 7 million units, have supported an increased earnings guidance for the fiscal year ending March 2026. Upcoming catalysts in the next 12 to 18 months include two films and the potential launch of Onimusha.

Konami's Strategic Advantages

Konami is poised to benefit from World Cup excitement and declining mobile platform fees. A significant financial tailwind is expected as Google's platform fee changes could reduce Konami's aggregate fee for eFootball from 27-28 percent down to 22-23 percent by fiscal year 2029. User engagement has also seen a notable increase.

Summary and Outlook

Both companies are positioned for sustained growth due to strong product pipelines and favorable market conditions. Investors will watch for further details on future lineups during upcoming summer showcase events, which could provide greater confidence in the medium-term outlook.

FAQ

Q: Which Japanese videogame stocks did Bernstein rate as "Outperform"?
A: Bernstein highlighted Capcom and Konami as stocks poised for growth, citing strong franchises and positive financial outlooks.

Q: What are the main growth drivers for Capcom?
A: Key drivers include strong sales from major franchises like Resident Evil, a robust pipeline of new games, and upcoming movie releases.

Source: Investing.com