What to Watch For in Electronic Arts' Q2

Electronic Arts Inc. (NASDAQ: EA) is set to report its most recent quarterly results after the markets close on Tuesday. The Thomson Reuters consensus estimates are $0.58 in earnings per share (EPS) and $1.18 billion in revenue. The fiscal second quarter of last year reportedly had $0.62 in EPS and $1.18 billion in revenue.

Wedbush came out and added EA to its Best Ideas List in a recent report. The firm has a Buy rating with a $158 price target.

The brokerage firm expects significant growth for the foreseeable future, driven by cost discipline, digital sales growth and several key evergreen franchises. EA has delivered the leverage inherent in its business model on a combination of higher margin from an increasing mix of digital sales and better-than-expected cost control.

With its dominant sports franchises and well-developed recurring revenue model, Wedbush believes that EA represents a solid opportunity for investors to benefit from continued digital growth for the industry over the next several years.

Excluding Tuesday’s move, EA has underperformed the broad markets, with the stock down 22% in the past 52 weeks. In just 2018 alone, the stock is down 13%.

A few analysts weighed in on EA ahead of the report:

  • SunTrust Banks has a Buy rating with a $116 price target.
  • Buckingham Research has a Buy rating and a $143 target.
  • Stifel has a Buy rating with a $140 price target.
  • Barclays has a Buy rating with a $132 price target.
  • MKM Partners has a Buy rating and a $157 price target.

Shares of Electronic Arts were last seen up 1% at $92.12, with a consensus analyst price target of $139.29. The 52-week trading range is $89.12 to $151.26.