On Thursday, Oppenheimer analyst Martin Yang adjusted the price target for Electronic Arts (NASDAQ:EA) shares, reducing it to $140 from the previous $165, while retaining an Outperform rating on the company. According to InvestingPro data, analyst targets for EA currently range from $133 to $183, with the stock trading at a P/E ratio of 36.5x. The revision follows Electronic Arts' release of preliminary F3Q25 bookings and a reduction in FY25 bookings guidance by 7.5%, marking the most significant guidance cut since FY19.
The company's management has attributed the subdued outlook primarily to its Global Football franchise, which is expected to show mid-single-digit declines in FY25. Additionally, sales of Dragon Age fell short of expectations by 50%. Yang noted the challenges in setting accurate expectations for FY26, indicating that the substantial reduction in the near-term outlook for Global Football did not provide the clear reset investors were hoping for. Comparatively, the analyst expressed greater concern over the declines in Global Football than a potential delay in the Battlefield series.
Despite the lowered guidance and disappointing sales figures, Yang believes the stock's risk/reward profile over the next 12 to 18 months remains attractive, based on a pre-market price of approximately $122. Supporting this view, InvestingPro data indicates the stock's relatively low volatility with a beta of 0.8, while technical indicators suggest the stock is currently in oversold territory. The reiteration of the Outperform rating and the decrease in the price target to $140 reflect the revised estimates following the latest financial update from Electronic Arts. Investors seeking deeper insights can access comprehensive valuation metrics and 10+ additional ProTips through InvestingPro's detailed research reports.
In other recent news, Electronic Arts (EA) has been under the microscope with analysts adjusting their outlooks and price targets for the company. Stifel cut EA's stock price target to $133 following weaker-than-expected launches for EA Sports FC 25 and Dragon Age: The Veilguard. This led to a reduction in EA's full-year 2025 guidance, with the company reporting preliminary net bookings of $2.215 billion for the quarter, a 6% year-over-year decrease.
Baird also reduced EA's price target to $158 while maintaining an Outperform rating. BofA Securities downgraded EA's stock rating from Buy to Neutral and slashed the price target to $130, citing concerns over EA's ability to generate growth within the challenging PC and console game industry.
BMO Capital Markets downgraded EA's stock rating to Market Perform and reduced the target price to $145, following a shortfall in Bookings. EA's revised fiscal outlook anticipates a mid-single-digit decline in live services net bookings, and net bookings of approximately $2.215 billion for the third fiscal quarter.
These adjustments were influenced by recent developments such as decreased player engagement and modest sales of Dragon Age. Analysts' projections for EA's growth in fiscal year 2026 have become more variable due to the uncertain release date of Grand Theft Auto 6. EA will provide detailed financial results for the third fiscal quarter on February 4, 2025. These recent developments highlight the dynamic nature of EA's financial performance and the ongoing analysis by market experts.
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