UPDATE: HIlliard Lyons Downgrades Electronic Arts on Valuation

In a report published Wednesday, Hilliard Lyons analyst Jeffrey S. Thomison downgraded Electronic Arts EA from Neutral to Underperform.

In the report, Hilliard Lyons noted, “We are lowering our rating on EA to Underperform from Neutral. This change is primarily based on considerable stock price appreciation and a related increase in valuation. Over the past twelve months, EA shares are up 105% compared to a 21% rise in the S&P 500 and a 22% gain for the NASDAQ Composite. Meanwhile, the multiple on EA's expected forward earnings is 21x. This compares to an approximate 10x multiple one year ago. We believe expectations for company and industry catalysts are mostly reflected in the current stock price. Therefore, we believe profit taking (partial or full positions) may be prudent.”

Electronic Arts closed on Tuesday at $26.55.