Oppenheimer lowered the firm’s price target on Electronic Arts (EA) to $140 from $165 and keeps an Outperform rating on the shares. The firm notes that on January 22, EA released preliminary Q3 bookings and cut FY25 bookings guidance by 7.5%, the worst cut since FY19. Management attributes the weaker outlook primarily to Global Football, expected to show mid-single digit declines in FY25. Dragon Age sales also disappointed, falling short of management expectations by 50%. Oppenheimer also points out that the drastic cut to Global Football’s near-term outlook does not provide a hard reset that investors looked for. Relative to a Battlefield delay, declines in Global Football are more alarming, it argues. However, based on a pre-market price of about $122, the firm believes the 12- to 18-month risk/reward profile still looks favorable.
