Benchmark cuts EA stock price target to $140, maintains Buy rating

On Wednesday, Benchmark analysts adjusted their outlook on Electronic Arts (NASDAQ:EA) shares, reducing the price target from $163.00 to $140.00 but maintaining a Buy rating. The revision follows Electronic Arts’ third-quarter fiscal year 2025 earnings, which showed a disappointing performance in the Global Football segment. The analysts believe this downturn in premium unit demand may be attributed to heightened interest during the World Cup period and the introduction of the FC brand, which is now beginning to stabilize. The stock, currently trading at $127.33, has declined over 17% year-to-date, with InvestingPro data showing it’s currently in oversold territory.

Electronic Arts faced challenges with balance issues in their FC game, which the company has acknowledged and is addressing. Benchmark analysts anticipate that stabilization of the FC game could occur in fiscal 2026. They also highlight the upcoming launch of Battlefield as a potential catalyst for Electronic Arts’ valuation. The success of these initiatives is contingent on the company’s ability to ensure the game’s quality and strategically time its release. With a robust gross profit margin of 78.57% and strong financial health indicators, including more cash than debt on its balance sheet, the company appears well-positioned to invest in these improvements. InvestingPro subscribers can access 10+ additional insights about EA’s financial strength and growth potential.

Despite the reduction in the near-term growth forecast, Benchmark sees the recent decline in Electronic Arts’ stock price as a potential buying opportunity. The analysts suggest that if the current weakness in the FC game proves to be temporary and the Battlefield game meets expectations, it could offer an attractive chance for investors to acquire shares in the company.

Electronic Arts’ attention to resolving the FC game’s balance issues and their strategic planning for the Battlefield release are expected to play a crucial role in the company’s future performance. Benchmark’s revised price target reflects a more conservative estimate of Electronic Arts’ growth prospects in the near term while still indicating a positive long-term outlook for the stock.

In other recent news, Electronic Arts (EA) has been the subject of several analyst reviews, following the company’s third fiscal quarter underperformance in EA Sports FC 25. BMO Capital Markets lowered their price target for EA from $145.00 to $142.00, maintaining a Market Perform rating. This adjustment was made in light of potential challenges facing EA’s FY26 game lineup, particularly due to the anticipated release of GTA VI in Fall 2025.

Goldman Sachs also reduced their 12-month price target for EA, from $140 to $135, while maintaining a Neutral rating. This was in response to EA’s reported mid-single digit year-over-year decline in net bookings for EA Global Football in the third quarter. However, the company expressed optimism about returning to growth in fiscal year 2026, even without the release of Battlefield.

Meanwhile, BofA Securities raised EA’s price target from $130.00 to $132.00, maintaining a Neutral rating. The firm pointed out that fewer FC 24 players transitioned to the latest FC 25 iteration, and the combined player base for the franchise remained flat year-over-year. On the other hand, Oppenheimer maintained its Outperform rating and $140.00 price target for EA, noting that significant updates in late January aimed to improve player re-engagement and increase session lengths.

Lastly, Citi reduced their price target for EA to $139 from $163, acknowledging recent weaknesses in some of the company’s franchises, including EA FC and Dragon Age. Despite lower forecasts for net bookings and non-GAAP EPS for fiscal years 2025 to 2027, the new price target still represents a valuation of roughly 19 times the projected fiscal year 2026 non-GAAP EPS. These recent developments reflect adjustments in the market’s expectations for EA’s performance and future plans.

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