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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.
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