UPDATE: Credit Suisse Initiates Electronic Arts at Neutral; Online Execution Uncertainty

Credit Suisse initiated coverage on Electronic Arts EA with a Neutral rating and a $16 price target. Credit Suisse commented, "With the potential for Star Wars and the likes of Sims Social to spearhead EA's ongoing transition to digital now behind us, EA has much work ahead of it, as our calculations suggest the bulk of its current digital revenue is still generated from its download and social efforts as opposed to the retooling of its existing core and sports franchises. Waiting on the Sidelines for EA to Execute on the Online Opportunity - which still lies ahead for EA with its existing and larger franchises, namely FIFA and Battlefield. Although valuation is undemanding at 5.7 times P/E ex-cash using our CY13 adjusted EPS estimate, we remain in wait-and-see mode for EA to deliver on its growth potential given its recent track record." Electronic Arts closed at $12.89 on Wednesday.