Why FIFA 16 Is Good For EA Investors

• Shares of Electronic Arts, Inc. EA have risen by 46.6 percent, year to date.
• Piper Jaffray’s Michael J. Olson has reiterated an Overweight rating on the company, while raising the price target from $85 to $86.
• The company launched FIFA 16 on September 22, and the early “expert” reviews have been “solid.”

Analyst Michael J. Olsen reported that for FIFA 16, the “current average "metacritic" rating on next-gen is 84.5, above last year's 82,” while mentioning that the company’s Sports titles have been improving, year on year, which could provide upside to the estimates.

Olsen also said that the robust reviews and the larger next-gen installed base suggest that the Madden and FIFA estimates “could prove to be conservative.” Robust digital attach rates are expected for both FIFA and Madden.

FIFA 16 offers a new mode, called “FIFA Ultimate Team Draft,” which allows players to play a variant of Ultimate Team at a lower cost. Reviewers also reported that there were more control options and that the AI was better, while appreciating the inclusion of women’s national teams that had participated in the World Cup in 2014.

Electronic Arts is expected to benefit from the persisting growth of the hardware installed base, given its strong titles through 2H15. “EA is also experiencing a steady upward operating margin trajectory,” according to the Piper Jaffray report.

Olsen believes that robust sales could drive digital revenue further, due to an increased player base for Ultimate Team.