Bank of America (BofA) recently downgraded Electronic Arts (EA) from a Buy to a Neutral rating, lowering its price target from $170 to $130. This shift reflects BofA’s diminished confidence in EA’s ability to capture sufficient player engagement and spending to achieve substantial growth within the challenging PC and console gaming market, particularly without the significant contribution of football as a primary growth driver.
BMO Capital echoed this sentiment, downgrading EA to Market Perform from Outperform and reducing its price target from $160 to $145. Concurrently, Raymond James also lowered its rating for EA to Market Perform from Outperform, withdrawing its previous price target.
These downgrades underscore a broader concern regarding the current state of the PC and console gaming industry. The absence of a key growth engine like football, coupled with the overall industry struggles, presents a significant hurdle for EA. Analysts suggest that EA’s ability to navigate these challenges and secure meaningful growth in player engagement and spending will be crucial for its future performance. The revised price targets reflect the perceived increased risk and potentially slower growth trajectory for EA in the near term.
