UPDATE: Bank of America Reiterates Neutral Rating, Raises PT on Electronic Arts Following Solid 1Q Beat

In a report published Wednesday, Bank of America analyst Justin Post reiterated a Neutral rating on

, and raised the price target from $38.00 to $40.00. In the report, Bank of America noted, “EA reported a solid F1Q vs. street at rev/EPS of $775mn/$0.19 vs. $714mn/($0.04). The top-line beat to our estimates was driven equally by Digital (Ultimate Team, Titanfall DLC, BF4 DLC) and Physical (UFC, Catalog), and EPS upside was aided by higher gross margins (70% vs. 67%) and lower OPEX. Digital was a bright spot at up 28% y/y, driven by 39% smartphone growth, 90% Ultimate Team growth, and 10-15% digital full-game download rate for new games (which is up q/q).” Electronic Arts closed on Tuesday at $38.42.