Brean Capital Reiterates Buy on Electronic Arts Following Appointment of New CEO
In a report published Wednesday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $29.00 price target on Electronic Arts (NASDAQ: EA).
In the report, Brean Capital noted, “Electronic Arts announced the appointment of EA Sports head, Andrew Wilson, as CEO. The internal appointment likely comes as a bit of a surprise to investors, with expectations for a higher profile external hire. However, we believe Wilson is uniquely qualified for the role with an obvious passion for gaming and long and successful tenure at EA during which he can be accredited with building out Origin, the company's online gaming platform, standardizing EA Sports on a single new game engine, Ignite, increasing digital revenue from all of the company's sports franchises, and most importantly, taking the company's FIFA franchise to new heights. The 39-year-old Wilson, who will also serve as a director, is charged with leading the company's drive to push operating margin past 20% after closing F2013 at 10%. We believe Wilson inherits a company already on that path, with a strong pipeline of titles over the next few years and a stable of established IP to leverage. Wilson replaces John Riccitiello who resigned in March, after a rocky reign culminating in a disappointing F2013, during which EA lowered guidance twice.”
Electronic Arts closed on Tuesday at $27.60.
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