Baird Reiterates Outperform on Electronic Arts (EA) Following 4Q Beat
Baird maintained an Outperform rating and $80.00 price target on Electronic Arts (NASDAQ: EA) following the company's 4Q earnings report. EA reported net revenues of $924M, well-above consensus of $889M and guidance of $875M, driven by strength in digital revenues, in particular extra content and mobile. EPS of $0.50 was ahead consensus of $0.42, driven predominantly by continued ongoing cost discipline and buyback-related lower share count.
Analyst Colin Sebastian commented, "Following a noisy holiday print impacted by FX and physical-mix issues, EA reported an impressive top- and bottom-line beat, driven by digital outperformance (+18.3% Y/Y vs. +16.4% in F3Q), specifically mobile and FIFA Ultimate Team strength (FIFA Ultimate Team revenue +48% Y/Y ex-FX). Looking ahead, EA's strong product pipeline (Battlefield, Titanfall, Mass Effect, Mirror's Edge) and continued digital penetration should drive growth and healthy margin expansion. Reiterate Outperform rating."
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Shares of Electronic Arts closed at $64.54 yesterday.