Baird analyst Colin Sebastian lowered the price target on Electronic Arts (NASDAQ: EA) to $108.00 (from $114.00) after the company reported strong F2Q bookings growth and profitability driven by impressive acceleration in Live Services, successful FIFA/Madden launches, higher gross margin and lower-than-expected sales and marketing expenses. Near-term guidance also reflects continued momentum in core franchises. However, the lack of a new Battlefield release in FY21 creates greater execution risk as management expects to generate Y/Y bookings growth through significant Live Services expansion, greater monetization of lower-tier franchises, and new IP.

The analyst stated "On the call, management announced the next installment of key franchise Battlefield will not ship until FY22 - ostensibly to take advantage of a larger installed base of next-gen hardware. As such, the company provided more details on the remaining F21 release slate, which embeds growth across each of the other key franchises (e.g., Sports, Apex, Sims), new IP, and live services launching for other EA legacy titles. Importantly, management still expects Y/Y bookings and profit growth in FY21 (live services mix) even without Battlefield, although this raises execution risk fairly significantly". No change to the Outperform rating.