Electronic Arts (EA) is trading much higher in premarket trading today. The stock has seen significant buying interest on optimism over Apex Legends, its first free-to-play battle royale game. The game could compete with the likes of PlayerUnknown’s Battlegrounds and Fortnite.
EA surged 16% on February 8 after the company tweeted, “ApexLegends has eclipsed 10 million players and 1 million concurrent players!” The game hit the milestone within 72 hours of launch.
Game has attracted attention
Since its impressive launch, Apex Legends has continued its strong run, crossing 25 million players in the first week of launch. EA said, “Over the weekend we had well over 2 million concurrent players at our peak.” Thanks to these impressive numbers, EA has outperformed other gaming stocks Activision Blizzard (ATVI), GameStop (GME), and Take-Two Interactive Software (TTWO) in the last week.
Wall Street has also been warming up to Electronic Arts. Today, Bernstein raised EA’s target price from $91 to $120. Yesterday, Bank of America Merrill Lynch upgraded it to a “buy.” Jefferies also raised EA’s price target from $80 to $90. Atlantic Equities predicts that Apex Legends will challenge Fortnite’s dominance.
Gaming stocks have seen waning investor interest as the high growth rates that markets have become accustomed to have slowed. In China, gaming companies such as Tencent (TCEHY) have been hit by the slow pace of approvals from regulators.
Both Electronic Arts and Take-Two Interactive Software missed their fiscal 2019 third-quarter revenue estimates. Activision Blizzard is scheduled to release its fourth-quarter earnings results today. Read ATVI’s Q4 Earnings: What’s the Word on Wall Street? to see what analysts are projecting for ATVI’s results.