UBS Adjusts Estimates on Electronic Arts (EA) Following 2Q Report
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UBS reiterated a Buy rating and $90.00 price target on Electronic Arts (NASDAQ: EA) following the company's 2Q earnings report. UBS adjusted non-GAAP revenue estimates to $2.11b from $2.10b. Adjusted EPS estimates was raised to $2.37 from $2.33.
Analyst Eric Sheridan commented, "In FQ2, EA once again exceeded Street expectations on revs (on the strength of sports & mobile titles) while delivering better than expected margins & returning cash to shareholders. While management’s revised FY EPS guidance did not fully reflect the FQ2 beat, we believe this is largely conservatism (ahead of an impactful FQ3) as opposed to caution around the forward outlook. Moreover, a strong FIFA 17 launch (+13% sell-through YoY over first 4 weeks), the release of FIFA Mobile & upbeat commentary on the recent first-person shooter launches (albeit with no update on unit expectations) suggest that concerns over a light FQ3 may prove unwarranted. Longer term, we view the strength of EA's console, mobile & extra content revenues as signs that EA is benefiting from both cyclical & secular trends in gaming. Accordingly, we believe the risk-reward continues to skew favorably for EA at current levels."
Shares of Electronic Arts closed at $77.84 yesterday.
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