Electronic Arts Inc. (NASDAQ: EA) turned in above-consensus revenue and saw its stock rise on Wednesday, but Bank of America says its fiscal year outlook remains unchanged and is staying Neutral.
Bank of America’s Ryan Gee reiterated a Neutral rating on EA, raising the price target slightly from $100 to $102.
Gee noted EA’s Live Services revenue was up 12% year over year to $504 million, beating Street estimates, likely on stronger-than-expected performance of "FIFA" and "Sims 4." But the comps were easy, Gee said, and overall first-quarter results didn’t change Bank of America’s view on 2020.
Gee still sees better near-term upside for two other game companies, Take-Two Interactive Software, Inc. (NASDAQ: TTWO) on the strength of its "Borderlands" game, and Activision Blizzard, Inc (NASDAQ: ATVI), which he believes has a strong mobile pipeline.
Despite its earnings beat, EA kept its fiscal 2020 outlook unchanged.
“Given negative sentiment into the print, results may drive a relief rally with a few less downside risks,” Gee wrote in a note. “’Apex’ remains a key sentiment driver and nothing in 1Q (or 2Q outlook) has changed (positively or negatively) our overall outlook for that game.”
EA shares rose 4.4% on Wednesday to $92.50.
A Fourth Video Game ETF Arrives
Street Mostly In The Game On EA After Strong Quarter, Bullish 2020 Outlook
Latest Ratings for EA
|Jul 2019||Upgrades||Market Perform||Outperform|
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