Needham & Company Upgrades Electronic Arts (EA) Two-Notches to Strong Buy

October 30, 2013 6:55 AM EDT
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Price: $127.89 --0%

Rating Summary:
    30 Buy, 13 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 0 | New: 20
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Needham & Company upgraded Electronic Arts (NASDAQ: EA) from Hold to Strong Buy with a price target of $33.00.

"We are upgrading to a Strong Buy with a $33 PT in light of the positive 2Q revenue surprise, impressive opex control, impending console refresh cycle, and longer "tails" associated with digital gaming," analyst Sean McGowan said. "Looking at the quarter, EA reported 2Q results that far exceed prior guidance as digital revenues grew and cost management remained stringent. NG revenues were $1040mm compared to guidance of $975mm as digital revenues grew 11% YoY. EPS were $0.33 compared to our estimate of $0.11 as the company continues to manage for flat YoY expenses despite the console transition. The company reiterated FY revenue guidance ($4B) but now expects EPS of $1.25 (previously $1.20)."

The firm's FY2014 EPS estimate is now $1.35, up from their prior estimate of $1.20; '15 is $1.80, up from $1.60, and '16 is now $2.30 up from $2.00.

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 $24.13 yesterday.

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