Market Overview

Electronic Arts Analyst Stays Neutral Ahead Of Q4 Report, Says Upcoming 'Star Wars' Title 'Pivotal'

Electronic Arts Analyst Stays Neutral Ahead Of Q4 Report, Says Upcoming 'Star Wars' Title 'Pivotal'

Electronic Arts Inc. (NASDAQ: EA) stock has struggled as the video game maker's fourth-quarter report approaches Tuesday, and general investor concern is permeating the market in the wake of President Donald Trump's Twitter threats on trade with China.

Buckingham Research is staying neutral ahead of the print despite buzz around possible future growth in EA's "Apex Legends" game in China.

The Analyst

Matthew Harrigan maintained a Neutral rating on Electronic Arts with a $103 price target. 

The Thesis

Stocks plunged Monday morning after Trump’s tweets appeared to signal that trade talks with China had broken down.

The president tweeted that the United States would increase tariffs on $200 billion worth of goods, leading to fears of all-out trade war.

Harrigan said there would likely be a continued sell-off of EA stock Monday around the broader market fears; the stock was in the green at the time of publication. (See his track record here.) 

The stock's negative price action Friday was “unwarranted," the analyst said. 

The negativity could create an opportunity, Harrigan said. Buckingham is sticking to its already conservative estimate of about $400 million in incremental sales, he said. 

The China talk shouldn’t be too problematic overall, the analyst said. 

“Although China is a major growth opportunity for EA off possibilities such as 'Apex Legends' distribution with Tencent … Greater China represents only about 3 percent of EA's current top line." 

Harrigan is looking to the November release of a new "Star Wars" franchise game from EA.

“Despite negative market talk last Friday, we continue to regard the November 2019 'Jedi: Fallen Order' release as pivotal to EA in fostering a more creative decentralized approach, even though the game from EA's Respawn will have de minimis recurring revenue given the absence of a multi-player mode and absence of microtransactions." 

Price Action

Electronic Arts shares were trading higher by 1.43 percent at $93.82 at the time of publication Monday. 

Related Links:

Mike Khouw's Electronic Arts Trade

'A Network Effect': New Model For Video Games Relies On In-Game Cash

Photo courtesy of Electronic Arts. 

Latest Ratings for EA

Mar 2020MKM PartnersUpgradesNeutralBuy
Feb 2020SunTrust Robinson HumphreyMaintainsBuy
Feb 2020BMO CapitalDowngradesOutperformMarket Perform

View More Analyst Ratings for EA
View the Latest Analyst Ratings


Related Articles (EA)

View Comments and Join the Discussion!

Posted-In: Apex Legends China trade war video gamesAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at