Morgan Stanley initiated coverage of Ubisoft on Friday with a 'weight in line' recommendation and a price target of 31.5 euros, explaining that it prefers to stay away from the stock.

In a note published in the morning, the research firm acknowledges that the video game publisher has a vast market and potential cost leverage, but also that it is well placed, both culturally and technologically, to benefit from the emergence of AI.

Morgan Stanley also points out that the company's operating performance has been disappointing recently, while competition in its market remains as fierce as ever.

For the research firm, the group's short-term profile is not without risk, at a time when it is trying to revive its growth momentum with new securities.

It is also possible that the evolution of consumer tastes will lead to a shift away from Ubisoft's historical positioning, which has become known for its vast, detailed and open universes", it concludes.

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