Analysts cut 12-month price target for EA
In the previous part of this series, we saw that Electronic Arts (EA) delayed the release of Battlefield V. Wall Street analysts were not impressed, resulting in several price target cuts for the stock. EA also lowered its sales forecast for fiscal 2019 by $350 million, driven by the game delay and the impact of currency fluctuations.
EA said the reason for the delay was to make some final improvements to the game. Bank of America Merrill Lynch (BAC) downgraded the stock from “neutral” to “buy.” While Cowen reiterated a “market perform” rating for EA, it cut its 12-month price target from $114 to $111.
Although EA maintained that it delayed the game to make some last-minute changes, analysts believe that lackluster pre-orders for Battlefield V are behind the move. However, the delay could provide EA with the opportunity to add a battle royale mode to Battlefield V.
Fortnite made the battle royale gaming mode very popular among players, and EA might leverage this opportunity to attract gamers.
Average price target estimate of $142.33
While EA stock has been impacted recently, analysts are still optimistic about its long-term drivers. Of the 24 analysts tracking EA, 19 are recommending a “buy,” and five are recommending a “hold.” Analysts’ 12-month average price target for EA is $142.33. EA is trading at a 25% discount to analysts’ average estimate.