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Oppenheimer senior analyst of emerging technologies and services Martin Yang maintains an Outperform rating on Electronic Arts (EA) stock despite the share price's approximate 18% decline during Thursday morning's trading session (16.7% decline from the previous close). Yang joins Market Domination to elaborate on his outlook.
Yang notes the stock's decline is "justified" due to significant guidance cuts, primarily stemming from the underperformance of its sports video game FC 25, as the company's sports franchise has traditionally been "the cornerstone of EA's performance."
He explains that the company has been consistently "trying to introduce incremental innovations to the game." However, last year's changes felt too radical, making the game "unfamiliar" to players and creating a "disruptive" player experience that has led to lower engagement.
Nevertheless, Yang maintains an Outperform rating, stating that "we have reached the bottom for both multiples and earnings," suggesting the stock is positioned for potential upside from this point forward.
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This post was written by Angel Smith