In a recent report analysts of BOS brokerage house lowered their recommendation for CD Projekt Group and the target price of the company's shares. Until now they recommended "holding" them, but now Tomasz Rodak, author of the report and deputy director of the Equity Research Department at BOS, has changed the recommendation for the Polish developer to "sell". Meanwhile, the new target price for the shares is 90 PLN ($21) (previously: PLN 167 / $34.9 ; via Polish Press Agency [in Polish]). At the time of issuing the report, the stock price was slightly above PLN 116 ($27).
Cyberpunk 2077 will sell worse than expected
At the same time, BOS has lowered its sales forecast for Cyberpunk 2077. The sales volume in 2022 and 2023 will amount to 4 and 3.6 million copies respectively, 40 and 33% less than previously expected. Thus, the total sales of the game are to reach 28.4 million copies by 2024. Until now it was estimated that it will be 34.7 million copies.
CD Projekt loses on delays
The report justifies these bleak forecasts for CD Projekt with the company's recent actions. It is about giving up or postponing "most of the positive factors" that would increase the value of the company's shares in the coming years.
On the one hand, we have delays in releasing updates for Cyberpunk 2077 and The Witcher 3: Wild Hunt for 9th-gen consoles (the former eventually received the update in February), as well as paid expansions for Cyberpunk. On the other hand, CD Projekt abandoned the development of its proprietary engine, which - as we read - may mean the postponement of adding online features to the game:
"We assess that the company's recent actions have resulted in the cancellation or postponement of most of the positive factors that could have supported the share price: the release of The Witcher 3 for next-generation consoles has been postponed (without a specific date), paid expansions for Cyberpunk 2077 will not appear until 2023 at the earliest, and the cancellation of proprietary REDengine technology likely means that online elements will not appear in Cyberpunk 2077 in the near future."
It's worth remembering that the aforementioned delays were cited as the reason for CD Projekt's earlier problems on the stock market.. Also pulling of the publisher's products from Russia played its part.