Handelsbanken reiterates its buy recommendation on gaming company Embracer, according to a recent analysis.

In its analysis, the bank writes that the fourth-quarter results show that Embracer is on the right track and that there is more value creation ahead through the spin-off of Coffee Stain, which is expected to be an important trigger for the share.

"Our view of the spin-off has improved, as it is now a focused PC/console business with strong margins of around 50 percent on adjusted EBIT. We estimate that the value could amount to approximately SEK 8.5 billion, or 15 times expected EBIT in 2025/26," writes Handelsbanken.

The target price is being lowered by SEK 10 to SEK 130 (140). The revision comes at the same time as the bank is lowering its EBIT estimates for Embracer by 4-14 percent for 2025/26 to 2027/28.