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Investing.com - Roth/MKM upgraded Electronic Arts (NASDAQ:EA) from neutral to buy on Tuesday, raising its price target to $185.00 from $175.00.
The research firm cited EA as being at "an important inflection point" that positions the company for an "elevated, multi-year growth trajectory." Roth/MKM noted that ongoing low-to-mid single digit growth from key sports titles will be complemented by several upcoming releases.
These new titles include a fresh Battlefield game, new variations of The Sims, and other games such as Skate and Star Wars: Zero Company. The firm highlighted these releases as catalysts for future growth after a three-year period in which bookings declined at a 1% CAGR.
Roth/MKM identified the upcoming Battlefield launch, expected in fall, as "the most significant near-term key to share outperformance." The firm acknowledged that the franchise has underperformed with its last two releases - Battlefield V in FY19 and Battlefield 2042 in FY22.
The analyst expressed confidence that changes in Battlefield development over the past 3-4 years have put the game "in an excellent position to succeed," potentially reversing a trend where EA’s recent earnings recovery was driven "entirely by growth in interest income and share buybacks."
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