Oppenheimer lowered the firm’s price target on Electronic Arts (EA) to $140 from $165 and keeps an Outperform rating on the shares. The firm notes that on January 22, EA released preliminary Q3 bookings and cut FY25 bookings guidance by 7.5%, the worst cut since FY19. Management attributes the weaker outlook primarily to Global Football, expected to show mid-single digit declines in FY25. Dragon Age sales also disappointed, falling short of management expectations by 50%. Oppenheimer also points out that the drastic cut to Global Football’s near-term outlook does not provide a hard reset that investors looked for. Relative to a Battlefield delay, declines in Global Football are more alarming, it argues. However, based on a pre-market price of about $122, the firm believes the 12- to 18-month risk/reward profile still looks favorable.
Electronic Arts (EA) investors may be feeling a bit uneasy after Oppenheimer recently lowered their price target for the gaming giant from $165 to $140. This news comes as a surprise to many, as Electronic Arts has been a powerhouse in the gaming industry for years.
Oppenheimer cited concerns over potential delays in game releases and increased competition in the industry as reasons for the price target reduction. Despite this setback, many analysts still believe in the long-term potential of Electronic Arts and see this as a buying opportunity for investors.
It will be interesting to see how Electronic Arts responds to this news and if they can continue to innovate and create successful games in the future. Only time will tell if this price target adjustment will have a lasting impact on the company’s stock performance.
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