Brean Capital on
EA
Here is what one of Wall Street's top
gaming analysts, Todd Mitchell of Brean Capital, is expecting for
the quarter.Electronic Arts Still Has Momentum, But Shares Are
‘Toppy' According to Mitchell, Electronic Arts will likely
report upside to its prior guidance given strong attach rates on
"FIFA" and higher digital revenue. The analyst noted that
Electronic Arts faces a tough comp against "Titanfall" and
"Battlefield 4" in the prior year, but the company should narrow
the gap through an estimated $104 million in "Ultimate Team" DLC
revenue from the EA Sports title. Mitchell also added that EA's
"Battlefield" franchise now holds more inherent risk than
Activision Blizzard's "Call of Duty" given that the two most recent
"Battlefield" titles were the weakest in the franchise's history.
Moreover, the analyst argued that "Ultimate Team" may be "getting
ahead of itself." Bottom line, Mitchell stated that there are no
catalysts for the franchise over the next couple of years, while
average revenue per user levels are at the high-end for console
titles with little visibility into how the company can grow the
metric further. Despite expectations for a strong quarter, the
analyst suggested investors look for a pull-back in the stock
before being more aggressive. EA will report its fourth quarter
2015 results on Tuesday, May 5, after market close. Shares remain
Buy rated with an unchanged $61 price target.
|
|