Electronic Arts (EA) is No Darling but Shorts Should Beware

January 28, 2013 1:03 PM EST
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Price: $80.12 -0.32%

Rating Summary:
    19 Buy, 8 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Analyst at MKM are cautious on Electronic Arts (NASDAQ: EA), but are unwilling to take an overly negative view on the stock considering already pessimistic sentiment and the potential for a short squeeze.

"Based on current sentiment, we believe in-line 3Q results and no change to the full-year outlook could cause a short squeeze," warned analyst Eric Handler.

Short interest is at a 12-month peak and equals 26.4 million shares, more than 9 percent of the float, noted Hander.

"Furthermore, with the increasing likelihood of a new console cycle beginning at the end of this year and a more appealing release slate for EA in FY14 (Battlefield, Dragon Age, UFC), the company's longer-term appeal should improve in the coming quarters," added the analyst.

MKM Partners has a Neutral rating on Electronic Arts (NASDAQ: EA) with revised fair value estimate of $15.00 (from $13.00).

For an analyst ratings summary and ratings history on Electronic Arts click here. For more ratings news on Electronic Arts click here.

Shares of Electronic Arts closed at $14.77 yesterday.

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