Piper Jaffray Overweight on Electronic Arts
Piper Jaffray is out with a research report on Electronics Arts (NASDAQ: ERTS) and it has an Overweight rating and a $30 price target on shares.
In a note to clients, Piper Jaffray writes, "We are estimating EA's NPD game sales to come in near $232m during September, up 126% Y/Y on a down 42% y/y compare. Recall that Madden 12 missed the August NPD numbers and is therefore entirely recognized within the September data. EA published three front-line titles during the National Retail Federation month of September including: Madden 12 (2.6m units), FIFA 12 (430k units), and NHL 12 (360k units). We expect EA's catalog to be led by NCAA Football 12 (220k units). While we acknowledge NPD data remains relevant to the EA story, we are positive on shares of ERTS based on a number of upcoming potential catalysts outside of NPD's scope. For example, we anticipate the contribution of high margin PopCap digital revenue to benefit EA's fundamentals during calendar 2012. We also note the recent success of Sims Social on Facebook (currently 9m DAU's) and the December 20th launch of Star Wars: The Old Republic. All three of these digital businesses have favorable risk-reward profiles with the potential for significant revenue and EPS upside during fiscal 2012, in our view."
Shares of ERTS gained $1.2 yesterday to close at $23.59.
