Earnings Previews: Electronic Arts, MGM Resorts, Uber and More

Earnings reports released Tuesday morning were again overwhelmingly positive, with the vast majority of companies reporting profits that beat consensus estimates.

After markets close on Tuesday, four firms we covered in an earlier preview (Activision-Blizzard, Lyft, Occidental Petroleum and Skillz) are due to report results. Before markets open on Wednesday, results will be released by CVS Health, General Motors, Marathon Petroleum and Royal Caribbean.

Here are previews of four companies set to report June-quarter results after Wednesday’s closing bell.

Electronic Arts

Electronic Arts Inc. (NASDAQ: EA) has had a share price gain of about 1% over the past 12 months, but that includes a dip of nearly 18% in mid-November that has led to a bumpy recovery since. For the year to date, shares have slipped by less than 1%. As poor as this is, given the surge in tech stocks in 2020, it is still better than the performance of some of the company’s traditional competitors. Rising competition from the likes of Apple and Netflix in streaming games doesn’t help.

Analysts, however, are bullish on the stock, as 23 of 31 surveyed brokerages rate the shares a Buy or Strong Buy. The remainder have Hold ratings. At the recent price of around $140, the upside potential to the median price target of $166.50 is 19%. At the high price target of $184, upside potential reaches 31%.

Revenue for the company’s first quarter of fiscal 2022 is forecast at $1.28 billion, which would be down nearly 14% sequentially and nearly 8% year over year. Adjusted earnings per share (EPS) are forecast to decline by 48% sequentially and nearly 53% year over year. For fiscal 2022, analysts are looking for EPS of $6.39, an increase of about 12.5% year over year, and revenue of $7.44 billion, up 20%.

The stock currently trades at 22.5 times expected 2022 EPS, 20.2 times estimated 2023 earnings and 17.5 times estimated 2024 earnings. The stock’s 52-week trading range is $110.15 to $150.30. Electronic Arts pays an annual dividend of $0.68 (yield of 0.47%).

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