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On Wednesday, BMO Capital Markets analyst Brian J. Pitz updated the firm’s outlook on Electronic Arts (NASDAQ:EA), increasing the price target from the previous $142.00 to $166.00. The company’s stock rating remains at Market Perform following a review of its financial performance. According to InvestingPro analysis, EA is currently trading slightly above its Fair Value, with the stock showing strong momentum, gaining 19.29% over the past year.
Electronic Arts, a leader in the video game industry, reported fourth-quarter fiscal year 2025 bookings and operating income that exceeded expectations by 15% and 18%, respectively. This success is attributed to the resurgence of its flagship EA Sports FC franchise. The company’s initial fiscal year 2026 guidance for bookings, set at a midpoint of $7.8 billion, also surpassed consensus estimates by 2.5%. The company maintains impressive fundamentals with a 79.38% gross profit margin and healthy liquidity, as noted in InvestingPro’s comprehensive analysis, which includes over 10 additional key insights about EA’s financial health.
According to Pitz, the positive outlook is bolstered by anticipated growth across various titles in the EA SPORTS portfolio, as well as other popular games such as The Sims, Battlefield, and Skate. This projected growth is expected to compensate for a 5% decline from catalog sales and the game Apex Legends.
In response to these developments, BMO Capital has adjusted its expectations for fiscal year 2026, projecting a 7% increase in bookings and a 9% rise in adjusted operating income. The firm’s continued Market Perform rating reflects a neutral stance on the stock’s potential, while the revised price target of $166 signifies an increased confidence in the company’s financial trajectory.
Electronic Arts’ financial achievements and forward-looking guidance have clearly resonated with BMO Capital, leading to the revised price target as the company continues to navigate the competitive gaming market.
In other recent news, Electronic Arts (EA) reported its fourth-quarter fiscal year 2025 earnings, showcasing a revenue of $1.9 billion, which significantly surpassed the forecasted $1.55 billion. However, the company’s earnings per share (EPS) of $0.98 fell short of the anticipated $1.08. Despite this, EA provided a positive outlook for fiscal year 2026, projecting net bookings growth of 3-9%, driven by upcoming launches in its EA SPORTS portfolio and The Sims franchise. Raymond (NSE:RYMD) James maintained a Market Perform rating on EA’s stock, with analyst Andrew Marok noting the company’s strong performance and promising outlook for fiscal year 2026. Marok highlighted the positive reception of Battlefield and the resurgence of EA Sports FC as key factors contributing to EA’s growth prospects. EA’s report also demonstrated its ability to impress with its fiscal year 2026 forecast, supported by strong performances from key franchises like Battlefield and EA Sports FC. Despite these achievements, Raymond James’ unchanged assessment reflects the stock’s current valuation, which already accounts for recent successes.
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