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Investing.com -- MoffettNathanson upgraded Electronic Arts Inc (NASDAQ:EA) to "buy" arguing that the recent selloff presents a compelling entry point as the gaming company navigates near-term volatility.
EA shares have dropped about 30% from recent highs, but MoffettNathanson expects a rebound if the company executes well on its pipeline.
The brokerage sees EA’s core strength, franchise visibility, intact despite concerns over its latest FC, formerly called FIFA game. A new 5v5 mode, Rush, may have inadvertently diverted attention from Ultimate Team, EA’s key revenue driver, but analysts believe the company can both mitigate the impact and turn it into a broader monetization opportunity.
“We think the drawdown in EA’s stock is overdone. A shock surprise on the visibility of EA’s crown jewel, EA Sports FC, is most likely a function of a newly introduced game mode that perhaps has been too successful and diluted the normal course,” analyst said.
The note also downplayed the fallout from the underwhelming Dragon Age reveal, suggesting it could refocus the company ahead of a critical Battlefield launch.
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