Unity Software’s new bulls see ‘ample runway for growth’ (NYSE:U)

October 13, 2020 By iwano@_84 Off

Oppenheimer initiates Unity Software (NYSE:U) with an Outperform rating and $103 price target, calling the company a “proven success story, run by a visionary management team.”

The firm says Unity is successfully taking share in the $12B video game market and “beginning to see adoption of real-timer 3D content creation,” a $17B market.

Key quote: “Unity operates as a leader in a fast growing, massive video game market with substantial optionality outside of its established market segments to benefit from a proliferation of real-time 3D content applications.”

Credit Suisse starts Unity at Outperform and a $120 price target, viewing Unity as a “highly unique software platform selling into rapidly transforming and growing end markets, with multiple paths to potential revenue upside.”

Key quote: “Today, gaming represents the vastmajority of revenues, although the runway in non-gaming verticals remains significant. While nascent, industries such as Film (virtual studios/movie sets), Architecture, Engineering and Construction (building design and simulation) are rapidly embracing RT3D content. We size this combined market opportunity at $26bn globally and it is evolving rapidly. Under this framework Unity is currently ~3% penetrated, offering ample runway for growth.”

Unity Software shares are up 0.5% pre-market to $90.46.

Other bullish Unity initiations: Goldman Sachs, $100 price target; Piper Sandler, $112.

Hold/Neutral starts: BofA, $96; Barclays, $97; Stifel, $80.

Previously: Unity Software opening indication continues to rise at $73-$75, +44% from IPO (Sep. 18 2020)

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