BofA Global Research analyst Michael J. Funk upgraded Unity Software Inc. (NYSE: U) to Buy from Neutral, raising the price target to $56 from $46.
The analyst notes that improved monetization of U's industry-leading mobile game creation engine and a stabilizing mobile game advertising market create a compelling risk-reward profile.
Funk projects incremental revenue of $77 million and $93 million in 2025 from U's runtime fees and the retiring of Plus (net of expected churn), respectively.
On September 12, Unity announced plan pricing updates to allow the company to monetize its mobile gaming creation platform. The announced changes are a first step in improving Create segment profitability, notes the analyst.
With well-understood idiosyncratic execution and integration risks abating, Funk expects the stock to re-rate higher.
Effective ...