UPDATE: Piper Jaffray Raises PT on Electronic Arts on Solid Outlook

In a report published Wednesday, Piper Jaffray analyst Michael J. Olson reiterated an Overweight rating on Electronic Arts EA, and slightly raised the price target from $23.00 to $24.00. In the report, Olson noted, “Following the close of a challenging fiscal 2013 and now looking ahead to a better fiscal 2014, we remain confident in our Overweight rating on EA shares; raising PT to $24. Favorable FY14 guidance suggests EPS upside vs. consensus; EA guided to FY14 EPS of $1.20 vs. Street EPS of $1.10. It is evident in EA's outlook that, despite the expected near-term "air pocket" in software sales (due to the console transition), EA is uniquely positioned vs. other publishers in the sense that catalysts for the story are myriad. Specifically, in addition to the upcoming next gen hardware launch (a catalyst shared with all publishers), EA shares are positioned to benefit from a major title launch in the Dec-13 qrtr (BF4) and an ongoing path towards op margin expansion. Our target multiple moves to 19x CY14E EPS from 16x CY13E EPS with incremental confidence in the op margin expansion story.” Electronic Arts closed on Tuesday at $18.41.
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