Analyst Downgrades EA Stock Amid Star Wars Troubles

Morgan Stanley cut Electronic Arts to "equal weight"

Managing Editor
Jan 12, 2018 at 10:04 AM
facebook X logo linkedin


Electronic Arts Inc. (NASDAQ:EA) is down 0.8% to trade at $111.00 this morning, after Morgan Stanley downgraded the video game stock to "equal weight" from "overweight," while issuing a price-target cut to $120 from $126. Morgan Stanley cited weak digital revenue for its "Star Wars" game, as well as the company's conservative stance on upcoming titles, as reasons for the downgrade. SunTrust Robinson chimed in with a price-target cut of its own, to $130 from $133.  

Since touching a record high of $122.79 on Aug. 31, the equity has given back 10%, and has posted only three winning weeks since early October. Any attempts at a renewed breakout have been thwarted by the shares' 100-day moving average. Furthermore, EA stock recently formed a death cross with its 50- and 200-day trendlines.  

Nevertheless, most analysts remain optimistic. Of the 19 brokerages covering EA, 16 rate the shares a "buy" or "strong buy." In addition, EA's average 12-month price target of $128.52 represents a 16% premium from the stock's current perch, and is in uncharted territory for the shares. This implies that more downgrades and price-target cuts could be on the horizon. 

Options traders are also confident. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), EA boasts a 10-day call/put volume ratio of 1.60. This ratio is in the 67th percentile of its annual range, pointing to a healthier-than-usual appetite for long calls over puts lately. Continued technical struggles could lead to an unwinding of these bullish bets.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI