Initial positive reaction to Electronic Arts Inc. (NASDAQ: EA)'s "Apex Legends" season 2 previews should in part give investors confidence in the video game maker's ability to beat earnings and its own guidance in fiscal 2020, according to BMO Capital Markets.
BMO's Gerrick Johnson maintains an Outperform rating on Electronic Arts with a price target lifted from $116 to $130.
EA's management team commented at this year's E3 event the "Apex" brand remains strong despite concerns of slowing Twitch viewership, Johnson wrote in a note. The trailer for the second season has received 3 million views in the first four days alone with a 95% like-to-dislike ratio.
BMO's note coincides with the Tuesday launch of "Apex Legends" and brings "much needed" new content, a new character, a new ranked game mode, and perhaps most important new virtual goods for sale.
Respawn was responsible for developing "Apex Legends," and the studio -- rather than DICE -- also worked on "Star Wards Jedi: Fallen Order." As such, gamers are more likely to try the new "Star Wars" game that also received a positive reception when gameplay footage was released.
Johnson said the inclusion of a street-themed gameplay in "FIFA" soccer games "lends itself well" to in-game customization and could help the game see better than expected sales.
Shares of Electronic Arts traded higher by 1.3% at $102.25 Tuesday afternoon.
E3: Morgan Stanley's 6 Takeaways
Photo courtesy of EA.
Latest Ratings for EA
|Jun 2019||Initiates Coverage On||Neutral|
|Jun 2019||Initiates Coverage On||Buy|
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