Analyst Says Buy the Dip on Electronic Arts Stock

The stock just bounced off an annual low

Assistant Editor
Dec 6, 2021 at 10:53 AM
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Electronic Arts Inc (NASDAQ:EA) is up 0.7% to trade at $126.11 at last check, after Citigroup upgraded the security to "buy" from "neutral," citing its recent weakness as a buying opportunity. However, the brokerage also cut its price target to $150 from $160. Today's rise has the stock on track for its third-straight gain, after bouncing off a Dec. 1 annual low of $120.08. Year-to-date, EA is down 11.8%. 

A short-term bounce could've already been in the cards. This is per EA's Relative Strength Index (RSI) of 26, which sits in "oversold" territory. 

Citigroup is joining a bullish majority. Of the 19 analysts in coverage, 14 carry a "buy" or better rating on EA, while five call it a "hold." What's more, the 12-month consensus price target of $174.20 is a 37.6% premium to current levels, which would be a fresh record high for the equity. 

An unwinding of pessimism over in the options pits could send Electronic Arts stock higher still. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.39 puts have been bought for every call over the last two weeks. This ratio stands higher than 97% of readings from the past year, indicating puts being picked up at a much faster-than-usual rate. 

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