UBS cuts Electronic Arts stock price target to $138 from $160

On Wednesday, UBS analyst Christopher Schoell revised the price target for Electronic Arts (NASDAQ:EA) shares, reducing it from $160.00 to $138.00 while maintaining a Neutral rating on the stock. With analyst targets ranging from $125 to $183 and the stock currently trading at $126.87, InvestingPro data suggests EA is slightly undervalued based on its proprietary Fair Value model. This adjustment follows Electronic Arts’ recent financial disclosures.

Electronic Arts pre-announced its fiscal third-quarter bookings and revised its fiscal 2025 bookings guidance downward on January 22, citing weaker performance in global football and Dragon Age. Consequently, the company reported diminished profits for the third quarter and reduced its fiscal 2025 profit guidance by approximately 15%. Despite these challenges, InvestingPro analysis shows EA maintains strong financial health with a ’GOOD’ overall score, supported by robust profit margins of 78.57% and healthy cash flows. Get access to 12 more exclusive ProTips and comprehensive analysis with InvestingPro.

Management attributed the decline in global football to a combination of factors, including a less effective acquisition and migration from FIFA 24, as well as increased churn among competitive players. However, they noted a return to year-over-year bookings growth after a gameplay update in January, despite the total number of players remaining flat across the FIFA catalog. The guidance for the fourth quarter assumes double-digit declines in global football bookings, which Schoell suggested might be a conservative estimate. The stock’s recent performance reflects these challenges, with a 17.12% decline year-to-date and RSI indicating oversold conditions.

Looking forward to fiscal 2026, Electronic Arts is optimistic about returning to growth, fueled by a resurgence in FIFA and the introduction of new titles such as Battlefield, skate, and College Football 26. Nevertheless, the extent of this growth is expected to be influenced by the timing of these releases, especially in light of the potential launch of Grand Theft Auto VI. Schoell indicated that while the multi-year pipeline for Electronic Arts appears promising, more concrete information regarding FIFA’s recovery and the release and execution of new Entertainment titles is necessary. These factors are critical for driving accelerated growth.

For now, UBS projects an 8% increase in bookings and a 12% rise in operating income for Electronic Arts in fiscal 2026, contrasting with the 4% and 8% declines anticipated for fiscal 2025.

In other recent news, Electronic Arts (EA) has been the focus of several analyst adjustments following its third-quarter fiscal year 2025 earnings. Benchmark analysts revised their price target for EA from $163.00 to $140.00, maintaining a Buy rating. The adjustment was prompted by a downturn in the Global Football segment, which is expected to stabilize in fiscal 2026. On the other hand, BMO Capital Markets reduced its price target for EA from $145.00 to $142.00, keeping a Market Perform rating due to potential challenges facing EA’s FY26 lineup.

Simultaneously, Goldman Sachs reduced its 12-month price target for EA to $135 from $140, while maintaining a Neutral rating. This revision was triggered by a mid-single digit year-over-year decline in net bookings for EA Global Football in the third quarter. However, BofA Securities raised EA’s price target from $130.00 to $132.00, despite concerns about the potential structural decline in its football franchise.

Oppenheimer maintained its Outperform rating and $140.00 price target for EA, highlighting anticipation for the company’s earnings report and addressing investor concerns about EA’s fiscal year 2026 outlook. These recent developments underscore the importance of EA’s strategic planning for its upcoming Battlefield release and the resolution of balance issues in their FC game.

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