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Why Electronic Arts Stock Declined Recently

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Sep. 6 2018, Updated 10:02 a.m. ET

Average price target of $144.04 for EA

Gaming heavyweight Electronic Arts (EA) stock is currently trading at $113.41, which is 14.0% above its 52-week low of $99.63 and 25.0% below its 52-week high of $151.26. The stock has generated returns of 8.0% since the start of this year and has fallen close to 20.0% in the last three months.

Of the 24 analysts tracking EA stock, 19 recommended a “buy,” five recommended a “hold,” and there were no “sell” recommendations on the stock. The average 12-month price target for EA is $144.04, which indicates that the stock is trading at a discount of 27.0% to analysts’ estimates.

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Factors that impacted EA stock recently

Electronic Arts (EA) stock declined close to 10.0% on August 30 after the firm announced the delay of its next Battlefield video game. Battlefield V is slated to be launched on November 20, a delay of almost four weeks.

The stock prices of gaming companies such as EA and Activision Blizzard (ATVI) were impacted earlier this year, as investors were concerned about the blockbuster response to Epic Games’ first-person shooter game Fortnite. EA’s Battlefield is also a first-person shooter game, and it looks like EA wants to leave no stone unturned to compete with the popularity of Fortnite.

EA stock was also impacted after releasing its results for the fiscal first quarter of 2019[1. fiscal Q1 2019 ended June 30] on July 26, as Wall Street was unimpressed with its earnings forecast. While these recent events dragged EA’s stock price lower, its growth story remains intact.

Analysts expect EA’s revenues to rise ~3.0% to $5.32 billion in fiscal 2019 and 9.5% to $5.82 billion in fiscal 2020. The company’s earnings per share are expected to rise at a CAGR (compound annual growth) of 15.2% over the next five years.

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