Electronic Arts (EA) Downgraded to Sell at Zacks Investment Research

Zacks Investment Research cut shares of Electronic Arts (NASDAQ:EA) from a hold rating to a sell rating in a report published on Friday.

According to Zacks, “Electronic Arts is hurt by rising operating expense mainly due to higher investments in games and live services. Underperformance of Star Wars Battlefront 2 compared to Battlefield 1 launched in the year-ago quarter is also a dampener. The company also lowered its projection for earnings per share for fiscal 2018. The hit driven and competitive nature of the video game industry begets caution. However, EA continues to benefit from its popular franchises, especially Battlefield and FIFA. Shares have outperformed the industry in the past year.”

Several other analysts also recently weighed in on the company. Goldman Sachs downgraded Electronic Arts from a conviction-buy rating to a buy rating in a research note on Tuesday, December 12th. Cowen restated a hold rating and set a $104.00 target price on shares of Electronic Arts in a research note on Thursday, December 21st. Vetr downgraded Electronic Arts from a strong-buy rating to a buy rating and set a $121.82 target price for the company. in a research note on Monday, December 18th. Morgan Stanley downgraded Electronic Arts from an overweight rating to an equal weight rating and raised their target price for the company from $112.00 to $126.00 in a research note on Friday, January 12th. Finally, BTIG Research initiated coverage on Electronic Arts in a research note on Monday, December 18th. They set a neutral rating for the company. One investment analyst has rated the stock with a sell rating, five have assigned a hold rating, twenty-four have given a buy rating and one has given a strong buy rating to the stock. The company has a consensus rating of Buy and a consensus price target of $132.81.

NASDAQ EA traded down $2.87 during trading hours on Friday, hitting $118.36. The company had a trading volume of 2,456,288 shares, compared to its average volume of 2,721,206. Electronic Arts has a fifty-two week low of $88.07 and a fifty-two week high of $131.13. The company has a market cap of $37,184.64, a P/E ratio of 39.99, a P/E/G ratio of 1.86 and a beta of 0.80. The company has a current ratio of 1.92, a quick ratio of 1.92 and a debt-to-equity ratio of 0.24.

Electronic Arts (NASDAQ:EA) last announced its earnings results on Tuesday, January 30th. The game software company reported $2.06 earnings per share for the quarter, beating the consensus estimate of $2.03 by $0.03. The company had revenue of $1.97 billion during the quarter, compared to the consensus estimate of $2.02 billion. Electronic Arts had a return on equity of 25.42% and a net margin of 19.67%. sell-side analysts forecast that Electronic Arts will post 3.66 EPS for the current fiscal year.

In other news, EVP Chris Bruzzo sold 1,500 shares of Electronic Arts stock in a transaction that occurred on Monday, April 2nd. The stock was sold at an average price of $118.81, for a total transaction of $178,215.00. Following the sale, the executive vice president now owns 33,675 shares of the company’s stock, valued at $4,000,926.75. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, CFO Blake J. Jorgensen sold 10,500 shares of Electronic Arts stock in a transaction that occurred on Tuesday, January 9th. The shares were sold at an average price of $112.85, for a total value of $1,184,925.00. Following the sale, the chief financial officer now directly owns 159,114 shares in the company, valued at approximately $17,956,014.90. The disclosure for this sale can be found here. Insiders sold 91,579 shares of company stock worth $11,171,399 in the last three months. 2.55% of the stock is currently owned by corporate insiders.

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Cerebellum GP LLC bought a new stake in shares of Electronic Arts during the fourth quarter valued at approximately $129,000. First Bank & Trust bought a new stake in shares of Electronic Arts during the fourth quarter valued at approximately $134,000. Exane Derivatives acquired a new position in shares of Electronic Arts during the fourth quarter valued at approximately $142,000. Harel Insurance Investments & Financial Services Ltd. acquired a new position in shares of Electronic Arts during the fourth quarter valued at approximately $210,000. Finally, Wedbush Securities Inc. acquired a new position in shares of Electronic Arts during the fourth quarter valued at approximately $230,000. 95.45% of the stock is currently owned by institutional investors.

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About Electronic Arts

Electronic Arts Inc develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed.

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