Dallas, Texas 07/25/2014 (FINANCIALSTRENDS) – Electronic Arts Inc. (NASDAQ:EA) the gaming publisher was placed under much pressure as analysts Benchmark moved it rating from earlier Buy to Hold. Shares of this gaming for mobile maker lost by 2% on the stock market post the downgrade.
And it was not just the downgrade that the company had to contend with, but a revision in the target price as well. Mike Hickey, the analyst, revised the price target to $41.82, showing 9% upside. But there is a common sentiment of risk associated with the growth curve for this company.
Benchmark commented that presently, Electronic Arts Inc. (NASDAQ:EA) risk against reward was at a neutral level and balanced. The analyst shared that EA’s shares have risen substantially and will soon be at an upside, which is limited in its nature. This is expected to continue into the next few quarters. This would include execution risk which is now controlled and is expected to break into 2016 as a growth company.
Benchmark also noted that, Electronic Arts Inc. (NASDAQ:EA) will see challenges in cutting back on its operating expenses in the short term. It will continue to require additional focus on product performance as well. Credibility of the management is considered to be high and will have ensured a consensus if exceeded.
In recent times, EA shares were found to have risen by 90% in the 52 week low and the trading was found to have moved with a 15 and higher forward of P/E. Therefore, it is understandable when analysts advise caution. Benchmark is definitely playing safe by moving the stock from Buy to Hold. Target price revisions influence the potential investment coming into the company! As gaming manufacturers continue to compete in the marketplace where technology advances and low prices dominate, EA definitely has its work cutout in the coming quarters.