With just days to go before video game maker Electronic Arts (EA) drops its College Football game, which is expected to push EA’s FY25 bookings to $7.7B, Citigroup has downgraded the stock from Buy to Neutral. This is due to potential competition from the upcoming release of Grand Theft Auto IV, as well as recent issues with Apex Legends and overall economic worries about reduced consumer spending. As a result, shares slipped in today’s trading.
Citigroup’s 4.6-star analyst, Jason Bazinet, mentioned that while College Football should help balance the tough comparison from Star Wars Jedi: Survivor, the uncertainty around Apex Legends and broader economic risks make them more cautious.
Bazinet’s Neutral rating also ties into EA’s recent performance after providing disappointing FY25 guidance. In May, EA reported lower-than-expected FQ4 bookings and earnings and gave Q1 and FY25 guidance below what Wall Street was hoping for. However, the news that College Football will have an Ultimate Team component hints at more revenue beyond just game sales. Ultimate Team is a game mode where players build their own teams and has been a source of extra content sales for years with its soccer games.
As a result, Bazinet raised his price target for EA from $148 to $161, which is 10% above Friday’s close, but still moved to Neutral due to the limited upside and potential challenges ahead. It’s worth noting that, so far, Bazinet has enjoyed a 100% success rate on EA stock, with an average return of 10.44% per rating.
Is EA a Buy or Sell?
Overall, analysts have a Moderate Buy consensus rating on EA stock based on nine Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 5% rally in its share price over the past year, the average EA price target of $152.27 per share implies 5.46% upside potential.
