By Nate Wolf

Electronic Arts posted better-than-expected earnings for the March quarter, but not everyone on Wall Street is convinced shares of the videogame publisher will climb much further this year.

The company reported adjusted earnings of 98 cents a share from revenue of $1.9 billion after the close of trading on Tuesday. The consensus forecast among analysts tracked by FactSet was for 92 cents a share.

EA shares were up 0.4% at $155.08 Wednesday, while the Nasdaq Composite slipped narrowly.

Both videogame players and investors were excited to hear that EA will release the highly anticipated new installment of the Battlefield franchise in the current fiscal year, which ends in March 2026. The growth potential of the company's sports game portfolio, however, has Wall Street split.

EA stock tumbled in January after the company reported weak sales for EA Sports FC, its flagship soccer franchise. The company responded to poor reception among fans by revamping the game months after its release. That boosted last quarter's FC bookings, a metric that shows the total amount of products and services sold online or in person in that period, and appeared to ease investors' concerns.

EA is now trading 33% above the 52-week closing low of $116.53 it hit on Jan. 28, according to Dow Jones Market Data.

While most analysts maintained their ratings for EA after Tuesday's earnings release, Clay Griffin and Brendan Haselton of MoffettNathanson Research downgraded the stock to Neutral from Buy. They lowered their target for the price to $163 from $165, citing limited potential for gains following the changes to FC.

"Over the past several months, we've told clients that nothing matters more than credibly 'fixing' FC," Griffin and Haselton wrote. "Sounds like that's done. And not unnoticed by the market."

The pair said that the stock's recent bump wasn't unwarranted, but they warned that EA has now reached what they called a premium valuation.

Others on Wall Street had the opposite take, saying both EA's sports and nonsports portfolios have the potential to lift the stock.

Mohammed Khallouf of HSBC Global Research upgraded the stock to Buy from Hold and raised his target price to $190 from $126. Khallouf predicts next summer's FIFA World Cup will boost enthusiasm for the FC franchise, making the game a potential source of growth.

Khallouf also cited the Battlefield release and the videogame industry's relative insulation from tariff concerns as reasons for optimism.

Wall Street will be closely watching EA's rollout of Battlefield for signs of growth in the year ahead. But sales of the company's annual sports franchises, particularly FC, may also determine how much longer EA's recent rise can continue.

Write to Nate Wolf at nate.wolf@barrons.com

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May 07, 2025 12:53 ET (16:53 GMT)

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