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On Wednesday, BofA Securities analyst Omar Dessouky increased the price target for Electronic Arts (NASDAQ:EA) shares from $150.00 to $166.00, while maintaining a Neutral rating on the stock. The gaming giant, currently valued at $40.28 billion, has demonstrated strong financial health according to InvestingPro metrics, with a "GREAT" overall score of 3.02. The adjustment follows Electronic Arts’ fourth fiscal quarter bookings, which reached $1.80 billion, surpassing both BofA and Street estimates of $1.57 billion and $1.56 billion, respectively. The strong performance was attributed to the robust performance of the core EA Sports franchise and the successful launch of Split Fiction™. With an impressive gross profit margin of 79.38% and annual revenue of $7.35 billion, EA continues to demonstrate solid operational efficiency. InvestingPro analysis reveals 10+ additional exclusive insights about EA’s financial strength and market position.
Electronic Arts experienced significant momentum from the gameplay update of FC 25™ on January 16, which continued throughout the quarter. Post-update, FCUT bookings saw a high single-digit year-over-year increase. Dessouky noted that the engagement levels of the competitive player cohort normalized following the gameplay update, indicating that previous issues had been effectively addressed.
The launch of Split Fiction™ has been particularly noteworthy, with sales reaching approximately 4 million units to date. This figure is nearly twice the original forecast by Electronic Arts. The game’s success has contributed to the company’s overall strong performance in the quarter.
Electronic Arts’ positive results and the successful launch of new titles have led to increased investor confidence, as reflected in the updated price target by BofA Securities. The company’s ability to exceed internal expectations with Split Fiction™ and maintain steady growth in its flagship sports titles underscores its position in the competitive gaming market. Trading at a P/E ratio of 38.95, EA commands a premium valuation, reflecting market confidence in its growth potential. For detailed valuation analysis and comprehensive insights, check out the full EA research report on InvestingPro, available alongside 1,400+ other top US stocks.
In other recent news, Electronic Arts reported its fourth-quarter fiscal year 2025 earnings, revealing a revenue of $1.9 billion, which surpassed 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 company’s net bookings for the fiscal year 2025 were slightly down by 1% compared to the previous year. However, forward guidance for fiscal year 2026 projects net bookings between $7.6 billion and $8.0 billion, indicating 3-9% growth. Analysts from BMO Capital Markets raised their price target for Electronic Arts from $142 to $166, maintaining a Market Perform rating, citing strong performance in key franchises like EA Sports FC and Battlefield. Raymond (NSE:RYMD) James also maintained a Market Perform rating, noting the strong quarterly results and positive outlook for fiscal year 2026. Additionally, BMO Capital Markets adjusted its expectations for fiscal year 2026, projecting a 7% increase in bookings and a 9% rise in adjusted operating income. These developments reflect continued confidence in Electronic Arts’ financial trajectory and strategic initiatives.
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