Play This Video Game Stock Next Month

Madden creator Electronic Arts is set to report its earnings next week

by Lillian Currens

Published on Apr 30, 2019 at 3:28 PM

Video game concern Electronic Arts Inc. (NASDAQ:EA) is looking at a roughly 7% loss for April, which would mark its worst month since November. However, EA stock just showed up on the list of best stocks to own in May, according to Schaeffer's Senior Quantitative Analyst Rocky White. Not only that, EA tops the list with an average May return of 12.5% over the past 10 years, and has ended the month higher eight of those years.

Looking closer at the charts, EA is still up roughly 20% year-to-date, and has found recent support at its 100-day moving average. Circling back to the stock's aforementioned May performance, from where it currently sits at $94.37, a similar jump would rocket the security right atop the $106 area -- a level it hasn't touched since its spike in mid-February. 

EA Apr 30 New

EA could make big moves after it unveils its fiscal fourth-quarter earnings after the close next Wednesday, May 7. The options market is expecting a bigger-than-usual swing for the security, at 9.6%, much higher than the average one-day, post-earnings move of 6.7% over the past eight quarters. Plus, during the past two years, half of EA's post-earnings reactions have been positive, though the last upside move came after earnings a year ago. 

While the majority of analysts are optimistic about the stock, there's still room for upgrades, should the stock once again shine in May. EA currently holds 15 "strong buy" ratings and one "buy," compared to seven tepid "holds." Plus, the consensus 12-month target price of $102.93 only represents an 8.9% premium to current levels. 


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