EA's Strong Quarter Turns Heads On Wall Street As Analysts Reassess The Road Ahead

Electronic Arts Inc EA released its fourth-quarter results after Tuesday’s closing bell. 

Wall Street analysts rerated the stock after the report.

Wedbush analyst Michael Pachter reiterated Electronic Arts with an Outperform and raised the price target from $179 to $210.

JP Morgan analyst Cory A Carpenter maintained Electronic Arts with a Neutral and raised the price target from $135 to $160.

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Wedbush: Electronic Arts reported net bookings of $1.799 billion compared with Pachter’s estimate of $1.594 billion, consensus of $1.550 billion, and guidance of $1.444 billion-1.594 billion. Revenues exceeded expectations, driven by a rebound in EA SPORTS FC, the successful launch of Split Fiction, double-digit net bookings growth in The Sims, and continued strength in American Football titles.

Adjusted EPS was $1.58, compared with Pachter’s estimate of $1.21, consensus of $1.10, and guidance of $0.76– 1.17. Fiscal 2026 guidance for net bookings of $7.600 billion-8.000 billion and adjusted EPS of $7.60-8.40, compared with Pachter’s prior estimates of $7.830 billion and $8.38 and previous consensus of $7.900 billion and $6.93.

First-quarter 2026 guidance is for net bookings of $1.175 billion-1.275 billion and EPS of $(0.05)-0.15, compared with Pachter’s prior estimates of $1.250 billion and $0.51, and prior consensus of $1.264 billion and $0.23. First-quarter guidance assumes seasonally lower revenue, a five-point drag from Apex Legends, and a two-point drag from the catalog. Excluding Apex Legends, EA expects low single-digit live services growth in the period.

Pachter noted that the launch of Battlefwill likely result in sales of 7 million-15 million units for the year and expects Skate to add 3 million-5 million units more. At the low end, these titles should contribute $500 million of year-over-year growth; at the high end, they should contribute $1 billion.

Perhaps more importantly, Electronic Arts’ guidance contemplates that retail game prices will remain $70 for Xbox Series and PS5 releases. Electronic Arts noted it is highly likely that the company can raise prices for ALL of its new releases by $10 at retail, allowing it to capture $350 million of bookings growth in fiscal 2026 with only modest performance from its latest titles.

Pachter projected first-quarter revenue of $1.28 billion and EPS of $0.15.

JP Morgan: Three months ago, investors debated if the FC slowdown was temporary or structural, Dragon Age disappointed, and a Battlefield release in fiscal 2026 was uncertain due to GTA VI. A lot has changed in three months. FC proved to be a temporary “ebb,” the delay of GTA VI opened a window for Battlefield to launch in fiscal 2026, and Split Fiction nearly doubled expectations, according to Carpenter.

Carpenter listed his takeaways from management calls. The outlook does not include game price increases, but the analyst would not interpret them as off the table. Battlefield unit assumptions are prudent, given that the game has been out of the market for about four years.

The analyst noted Electronic Arts could achieve the low end of its fiscal 2027 margin framework a year early in a Battlefield “blue sky” scenario. The fiscal first-quarter outlook reflects FC trends consistent with recent weeks, which could prove conservative given the significant upcoming events in the quarter.

Battlefield will have live services tied to it, but management has yet to disclose the timing. Carpenter noted the outlook reflects Battlefield live services assumptions that are even more conservative than unit assumptions.

Apex 2.0 release timing will likely be further out so as not to conflict with Battlefield.

Catalog is a bigger headwind than Apex for the fiscal year, but Apex is a bigger headwind in the fiscal first quarter.

Carpenter did not anticipate any material change to the dividend.

He projected first-quarter revenue of $1.6 billion and adjusted EPS of $0.04.

Price Action: EA stock is up 1% at $156.08 at last check Wednesday.

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