It’s a good day to be EA (NASDAQ:EA), as Electronic Arts saw shares shoot up over 4% in Thursday afternoon’s trading. The biggest reason behind the hike? A new look at full-year profits and a view so bullish not even a recession could stop it cold.
The first bit of good news featured a look at EA’s upcoming full-year report. While the latest earnings report, brought out on Wednesday, brought with it good news of its own, it was the future outlook that helped brighten investors’ moods considerably. EA revealed that it looks for full-year 2023 earnings per share to come in between $4.10 and $4.66 per share, which is a far cry from EA’s original range of between $3.42 and $3.92. Much of the latest gains came with the newly-minted release of “FC 24,” which was its first soccer release without FIFA branding. It came in third in overall sales, losing out only to “Mortal Kombat 1” and Bethesda’s huge new release, “Starfield.”
Meanwhile, word from Andrew Wilson, EA’s CEO, also delivered a point that might well stiffen the spines of any hesitant investor. Wilson noted that video game companies are “more resilient” than other businesses, particularly during bad economic times. Indeed, some might look askance at that notion, noting that when the choice comes down to food or fun, food will more likely win out. But Wilson isn’t without precedent here; consider the rise of the movie industry during the Depression; people needed fun perhaps slightly less than they needed food. Wilson also pointed out the value gaming can represent, as one game can be fun for weeks, even months. That value makes it an attractive buy even in harsher economic times.
Is EA Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on EA stock based on six Buys and three Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average EA price target of $148.89 per share implies 15.56% upside potential.
