Electronic Arts' Q1 Bookings Outlook Raised Based On Pipeline Strength: Analyst Perspective

Truist Securities analyst Matthew Thornton reiterated a Buy rating on Electronic Arts Inc. EA, raising the price target to $150 from $138.

The analyst remains upbeat on the company's long-term games pipeline and M&A optionality.

The company's games pipeline boasts video games like - Battlefield under new leadership, Sims multi-player, Football (to include NCAA), Respawn Star Wars, Mass Effect, and Marvel 1P, among others. 

Based on pipeline strength, the analyst raised the bookings outlook for Q1. 

For the first quarter, the analyst models AEPS/bookings at $1.20/$1.65 billion (up from $1.04/1.58 billion) vs consensus at $1.02/$1.58 billion. 

For Q1, the analyst sees full-game sales (FGS), including 6 million Star Wars Jedi, 0.5 million PGA, and 0.5 million SMB, to remain flat y/y.

In addition, the analyst expects gross margin, OpEx, and below-the-line in-line with guidance (factoring share repurchases) for Q1.

Thornton assumes Battlefield in 2026 (from 2025), offset by a higher gross margin, lower OpEx, and higher interest income. 

For FY24, the analyst expects AEPS/bookings at $7.03/$7.61 billion (up from $6.79/$7.50 billion).

Beyond F2024, the analyst now models 2025 AEPS/bookings at $7.57/$7.81 billion (from $7.40/$7.90 billion) vs consensus $7.71/ $8.17 billion. 

Price Action: EA shares are trading lower by 0.22% to $137.91 on the last check Tuesday.