Credit Suisse Raises Price Target On Electronic Arts On Ultimate Team Beat

In a report published Wednesday, Credit Suisse analyst Stephen Ju reiterated an Outperform rating on

, and raised the price target from $55.00 to $56.00. In the report, Credit Suisse noted, “EA again posted a top and bottom line beat for 3QFY15 and revenue outperformance was compounded in the earnings results due to continued mix shift to the digital segment. We believe this is the key takeaway of the quarter specifically the growth in Ultimate Team business lines which grew 84% year-over-year. 4QFY15 guidance was below CS estimates and consensus as management indicated the delay of the release of PGA Tour 2016 and a Sims expansion. However, the products are scheduled for release in 1QFY16 and our longer term view does not change. FY15 guidance implies operating margin of ~24% as the cost discipline continues at EA. "While one of the three pillars of our investment thesis continues to manifests itself in cost containment, we maintain our Outperform rating as we focus on the next two pillars of 1) further positive mix shift to digital, as well as 2) the expansion of EA's addressable market to target the global online user base to start exerting a greater influence on margin expansion.” Electronic Arts closed on Tuesday at $48.41.