Electronic Arts held its EA Play Live event on Thursday night. There wasn’t anything Earth shattering for investors.
The gaming industry’s largest trade show, E3, was sidelined due to Covid-19. That left game publishers like Electronic Arts to showcase coming titles during in-house live streams. The biggest attraction of EA’s event was Star Wars: Squadrons, a multiplayer first-person space battle title set in Walt Disney’s (DIS) Star Wars universe.
Fans already knew this heading into the event. EA announced it on Monday and released a brief trailer. The company showcased more in-game footage on Thursday.
EA stock (ticker: EA) has soared 20% in 2020, even as the S&P 500 index floundered amid the fallout from the spread of Covid-19. Many people stuck at home and forced to cancel travel plans turned to videogames. That’s helped shares of EA, Take-Two Interactive Software (TTWO), and Activision Blizzard (ATVI), as the three prepare to sell games on Sony and Microsoft's next-generation gaming consoles that are due this holiday season.
Piper Sandler analyst Yung Kim said Squadrons should alleviate some concerns for investors regarding the company’s plan not to release a new Battlefield game in fiscal 2021. Kim on Friday raised his price target to $133 from $126, citing greater clarity on EA’s fiscal 2021 release slate, including the Star Wars game.
“We also anticipate growth of digital revenue and an acceleration in full game downloads in particular for the industry overall which drives margin expansion,” he added.
Jefferies analyst Alex Giaimo said the key themes of the event—like improved options for gamers to play with friends on different consoles and the expansions of existing games on the Nintendo Switch and the PC marketplace Steam—don’t really move the needle from the stock standpoint. He has a Hold rating on the stock with a $115 price target.
Instinet analyst Andrew Marok said such features show EA wants to distribute its titles as widely as possible and break down barriers between communities.
“While EA is not a first mover here, these are necessary and welcome steps to keep pace with the direction of travel in the industry,” Marok wrote.
Marok maintained a Buy rating with a $132 price target, noting the company said next-generation projects are in process at EA’s DICE and BioWare studios. He says DICE is likely working on the next Battlefield title, while BioWare’s project could be Dragon Age 4. Marok calls both “exciting applications of next-gen technology.”
EA stock was up 0.6% to $130.19 on Friday.
Write to Connor Smith at connor.smith@barrons.com
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June 20, 2020 at 05:34AM
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Electronic Arts Showed Off Its Next ‘Star Wars’ Game. What That Means for the Stock. - Barron's
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