Electronic Arts Inc. (EA) Downgraded by Zacks Investment Research to “Hold”
Electronic Arts Inc. (NASDAQ:EA) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Friday.
According to Zacks, “Electronic Arts reported strong first quarter fiscal 2018 results driven by continued increases in digital revenues and strength in franchises like The Sims, Star Wars, and EA Sports titles like FIFA 17 and Battlefield. EA has a strong pipeline of new launches that will continue to drive top-line growth. Also, shift to digital/mobile bodes well for the company. Moreover, live services component of the games has started to emerge as a big growth driver. EA has also announced an Ultimate Team style mode for its much anticipated game, Star Wars Battlefront. Gamers need to buy Star Cards to gain access to the in-game abilities. Apart from growing digital business, cost optimization initiatives will be beneficial going forward. Shares have outperformed the Zacks industry over the past one year. However, the hit driven and competitive nature of video game industry begets caution.”
Several other brokerages have also recently commented on EA. Credit Suisse Group restated a “buy” rating and set a $114.00 target price on shares of Electronic Arts in a report on Sunday, May 28th. Benchmark Co. increased their target price on shares of Electronic Arts from $114.00 to $131.00 and gave the stock a “buy” rating in a report on Tuesday, June 20th. Vetr upgraded shares of Electronic Arts from a “hold” rating to a “buy” rating and set a $99.98 target price for the company in a report on Monday, May 8th. Robert W. Baird restated an “outperform” rating on shares of Electronic Arts in a report on Thursday, May 11th. Finally, Bank of America Corporation upgraded shares of Electronic Arts from a “neutral” rating to a “buy” rating and set a $131.00 target price for the company in a report on Wednesday, July 26th. Five equities research analysts have rated the stock with a hold rating, twenty-one have assigned a buy rating and one has given a strong buy rating to the company’s stock. The company presently has a consensus rating of “Buy” and an average price target of $115.19.
Shares of Electronic Arts (NASDAQ:EA) traded down 1.37% during midday trading on Friday, hitting $117.22. 2,341,345 shares of the company’s stock were exchanged. Electronic Arts has a 52 week low of $73.74 and a 52 week high of $120.25. The company has a 50-day moving average of $111.06 and a 200-day moving average of $97.77. The firm has a market cap of $36.22 billion, a price-to-earnings ratio of 31.38 and a beta of 0.72.
Electronic Arts (NASDAQ:EA) last released its quarterly earnings results on Thursday, July 27th. The game software company reported $0.36 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.14 by $0.22. The company had revenue of $775 million during the quarter, compared to analysts’ expectations of $768.47 million. Electronic Arts had a net margin of 23.31% and a return on equity of 29.77%. The business’s quarterly revenue was up 13.6% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.07 earnings per share. Equities research analysts expect that Electronic Arts will post $4.24 EPS for the current fiscal year.
Electronic Arts announced that its board has approved a stock repurchase program on Tuesday, May 9th that allows the company to buyback $1.20 billion in outstanding shares. This buyback authorization allows the game software company to purchase up to 45% of its stock through open market purchases. Stock buyback programs are often an indication that the company’s board of directors believes its shares are undervalued.
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In other Electronic Arts news, EVP Joel Linzner sold 10,000 shares of the firm’s stock in a transaction that occurred on Monday, May 15th. The shares were sold at an average price of $100.34, for a total transaction of $1,003,400.00. Following the completion of the transaction, the executive vice president now owns 26,745 shares in the company, valued at approximately $2,683,593.30. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, EVP Kenneth A. Moss sold 5,000 shares of the firm’s stock in a transaction that occurred on Wednesday, August 2nd. The stock was sold at an average price of $116.72, for a total transaction of $583,600.00. Following the transaction, the executive vice president now owns 99,449 shares of the company’s stock, valued at approximately $11,607,687.28. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 341,915 shares of company stock worth $37,562,227. 2.55% of the stock is owned by corporate insiders.
Hedge funds have recently added to or reduced their stakes in the stock. Tocqueville Asset Management L.P. bought a new stake in Electronic Arts during the second quarter valued at $305,000. State Board of Administration of Florida Retirement System raised its stake in Electronic Arts by 0.5% in the second quarter. State Board of Administration of Florida Retirement System now owns 452,613 shares of the game software company’s stock valued at $47,850,000 after buying an additional 2,135 shares in the last quarter. Marshall Wace North America L.P. bought a new stake in Electronic Arts during the second quarter valued at $52,997,000. Blair William & Co. IL raised its stake in Electronic Arts by 5.6% in the second quarter. Blair William & Co. IL now owns 11,959 shares of the game software company’s stock valued at $1,264,000 after buying an additional 630 shares in the last quarter. Finally, Pegasus Partners Ltd. raised its stake in Electronic Arts by 2.3% in the second quarter. Pegasus Partners Ltd. now owns 11,447 shares of the game software company’s stock valued at $1,210,000 after buying an additional 254 shares in the last quarter. Institutional investors own 98.14% of the company’s stock.
Electronic Arts Company Profile
Electronic Arts Inc develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed.
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