Electronic Arts (EA) executives spoke with investors yesterday in a ‘fireside chat’, stating that the company plans to “double down” on Star Wars after the huge success of four previous Star Wars games. The Star Wars franchise is owned by Disney (DIS).
“Up is my hope. Up and to the right,” EA CEO Andrew Wilson said regarding the video game company’s aspirations for a lucrative future with Disney.
Highlighting two of its successful game titles, Star Wars: Battlefront 1 and 2, he stated, “Those games have combined to sell around 35 million copies.” Wilson added that EA’s mobile game, Star Wars: Galaxy of Heroes continues to reap “extraordinary” success. Additionally, 10 million sold copies of Star Wars Jedi: Fallen Order stand out as another achievement.
EA recently debuted a trailer for its next game title, “Star Wars Squadrons” which is targeted at a smaller subset of the gamer market.
Wilson was optimistic, “We’ve had success in first-person shooters, in RPGs, in action adventure, in MMORPGs, in mobile, and I believe we’re going to have success with Squadrons as well.” He added, “We’re going to double down on that partnership. Disney continues to be very, very committed to the IP and to the canon.”
The Street was responsive with Baird analyst, Colin Sebastian raising the price on EA to $150 from $130 yesterday while keeping a Buy rating with an upside potential of 15%. In his research note, he stated EA’s “growing” franchise with a “solid” pipeline of fresh content, along with its games-as-a service model. He increased estimate expectations for Q1 and fiscal 2021 above what the consensus anticipates.
EA CFO Blake Jorgensen said the company has no plans to communicate its sales projection on Star Wars Squadron but that the company is on track to exceed expectations in fiscal Q1.
MKM Partners analyst Eric Handler also expects Q1 to be “much stronger” than EA’s prior performance projection, he noted on June 23. He raised the price target on EA to $144 from $130 while also maintaining a Buy rating price, indicating upside potential of 10%.
EA’s stock is up 21% year-to-date with 16 analysts assigning a Buy rating, 7 Hold, and no Sell ratings which altogether results in a consensus of a Moderate Buy on TipRanks. The average analyst price target stands at $132 (1% upside potential). (See EA’s stock analysis on TipRanks)
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