First Berlin Equity Research has published a research update on Media and Games Invest SE (ISIN: SE0018538068). Analyst Ellis Acklin reiterated his BUY rating and decreased the price target from EUR 4.00 to EUR 3.20.

The effects of soft ad spend were in focus in Q2 reporting. Fx-adjusted organic sales growth (OSG) remained gated at 1% for the second consecutive quarter and well below levels reported in 2022 (18% to 23%). Headline Q2 figures were close to FBe, but management now expect ad spend to remain weak in H2 and reduced their 2023 guidance. Profitability remained strong resulting in good cash flows for the April-to-June period. The company remains well positioned with its products and technology, but investors will need to be patient as the ad markets work through a down cycle amidst macro headwinds. We have cut FBe to match updated 2023 guide and also dialled back our 2024 growth assumption until increasing ad budgets become more visible. We remain Buy-rated on MGI with a €3.2 TP (old: €4.0).