Sterne Agee Reiterates Buy, $27 Target on Electronic Arts

Sterne Agee maintains its Buy rating and $27 target price on Electronic Arts

as the company's Star Wars MMO experiences a healthy start. Sterne Agee says, "EA's just-launched Star Wars The Old Republic MMO game appears to have started off well as indicated by 1) healthy “Metacritic” ratings; 2) strong server usage trends in the first week (Tables 3 and 4); 3) few, if any, server disruptions; and 4) EA's announcement that there are already 1M registered players since launch. That said, the game's success will need to be measured over several quarters and not several weeks (unlike a console game). ...At the 1.0 to 1.5M annual sub level, we estimate $0.15 to $0.30 in annual EPS contribution and 10% to 20% IRR." EA closed at $20.71 per share on Friday.