EA Stock Sinks On "Battlefield V" Delay

The video game maker had to cut its 2019 bookings outlook, too

Managing Editor
Aug 30, 2018 at 10:17 AM
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Electronic Arts Inc. (NASDAQ:EA) is trading sharply lower this morning after the video game maker announced that the release date for its "Battlefield V" game would be pushed back four weeks to Nov. 20. Moreover, the company also had to downwardly revise its bookings outlook for 2019.

At last check, Electronic Arts stock was down 6.9% to trade at $119.61, on track for its worst day since January 2016. The drop today also has the shares breaching their 320-day moving average for the first time since May 2016. The video game stock gapped lower in late July following a subpar revenue forecast, and in recent weeks had essentially been consolidating between the $125 and $130 levels.

For a security that has shed nearly 20% this quarter, many analysts remain bullish. Of the 21 brokerages covering the equity, 17 rate it a "buy" or better, with zero "sells" on the books. Furthermore, the stock's average 12-month price target sits all the way up at $154.56, a 29% premium to its current perch and above its July 13 record high of $151.26.

In addition, there is ample room aboard the bearish bandwagon. Although short interest has more than doubled since July 1, the 9.27 million shares sold short represents only 3% of the total available float, or 2.2 times the average daily trading volume. 

Those wanting to speculate on EA stock may want to consider doing so with options. Its Schaeffer's Volatility Index (SVI) of 24% ranks in the 10th annual percentile, meaning short-term options are pricing in lower-than-usual volatility expectations at the moment, a boon to potential premium buyers.

 

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