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On Wednesday, DA Davidson made an adjustment to the financial outlook for Electronic Arts (NASDAQ:EA), raising the price target on the video game company’s shares to $150 from the previous $140. The firm maintained its Neutral rating on the stock. Currently trading at $154.54, EA has demonstrated strong momentum with a 19.29% return over the past year. According to InvestingPro data, the company maintains a GREAT financial health score, with multiple positive indicators available to subscribers.
The change in the price target was attributed to updated estimates for the company’s future performance. DA Davidson now forecasts that Electronic Arts’ net bookings will reach approximately $7.813 billion by the year 2026, marking a 6.2% year-over-year growth. This revised estimate is up from the prior projection of $7.527 billion. The company’s current market capitalization stands at $40.28 billion, with an impressive gross profit margin of 79.38%.
The analyst at DA Davidson cited several factors influencing the new estimates, including the expectation that Electronic Arts will successfully launch new titles in its Battlefield (BF) and Skate franchises. The less competitive environment anticipated for that year is also expected to play a role in the company’s performance.
However, these positive expectations are somewhat tempered by concerns over broader economic conditions and uncertainties regarding Electronic Arts’ ability to deliver on some of its non-annualized titles. Despite these potential challenges, the adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) estimate has been increased from $2.596 billion to $2.878 billion.
Summing up the revised financial expectations, the analyst stated, "Our PT increases from $140 to $150 (implies 18x our FY™26 P/norm EPS), and we reiterate our NEUTRAL-rating." The new price target is based on an 18 times multiple of the forecasted normalized earnings per share for the fiscal year 2026. InvestingPro analysis suggests EA is slightly overvalued at current levels, with detailed valuation metrics and 10+ additional ProTips available in the comprehensive Pro Research Report, helping investors make more informed decisions about this gaming giant.
In other recent news, Electronic Arts reported its Q4 2025 earnings, revealing a revenue of $1.9 billion, which exceeded the forecasted $1.55 billion. Despite the revenue beat, the company’s earnings per share (EPS) of $0.98 fell short of the anticipated $1.08. The strong revenue performance was driven by successful product launches, including the launch of Split Fiction™, which sold nearly 4 million units, almost double the company’s original forecast. Analysts at BofA Securities and BMO Capital Markets have raised their price targets for Electronic Arts to $166, citing the company’s robust financial performance and positive outlook for fiscal year 2026.
Electronic Arts’ fourth-quarter bookings reached $1.80 billion, surpassing both BofA and Street estimates. The company’s initial fiscal year 2026 guidance for bookings is set at a midpoint of $7.8 billion, exceeding consensus estimates by 2.5%. Analysts from Raymond (NSE:RYMD) James maintained a Market Perform rating on the stock, highlighting the positive reception of Battlefield and the resurgence of EA Sports FC. The company’s forward guidance suggests 3-9% growth in fiscal year 2026, with anticipated contributions from upcoming launches in its EA SPORTS portfolio and The Sims franchise.
Overall, Electronic Arts’ financial achievements and forward-looking guidance have resonated positively with analysts, leading to revised price targets and increased investor confidence. The company’s ability to exceed internal expectations and maintain steady growth in its flagship titles underscores its position in the competitive gaming market.
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