Analyst Downgrades EA Stock Rating, Says They Have A Lot To Prove

EA’s lineup for 2019 is largely untested, analyst says.

Posted By | On 17th, Jan. 2019 Under News

EA hasn’t had the best time of things lately. Star Wars Battlefront 2 underperformed, Mass Effect Andromeda was a mess, Need for Speed hasn’t done well in a while, and even Battlefield 5 may have underperformed, judging by early indications we have. Plus from what we are hearing, they have canceled another Star Wars game that was in development.

Through all of this, EA has continued to make a lot of money, which is thanks to their sports games, especially the FIFA series, which pulls in a lot of money every year—sometimes to the tune of a billion dollars (no, seriously). However, according to Jefferies analyst Timothy O’Shea (via CNBC), sales for that may be slowing down as well, and with EA’s other problems, that means their lineup for the coming year is now largely untested as far as mass market viability goes, including games like Anthem.

“Non-sports games is precisely the area where EA has the most to prove,” O’Shea wrote. “Excluding sports games, EA has launched a string of misses.”

Even those sports games could be in trouble, with O’Shea saying that the backlash to lootboxes that Battlefront 2 induced could lead to a slowdown for Ultimate Team.

“When EA brought loot boxes to Star Wars Battlefront 2, the fan backlash was swift and severe,” O’Shea added. “Battlefront 2 dramatically underperformed its original estimates, and bowing to pressure EA capitulated to gamers by removing loot boxes from the game. This was a first important sign that Ultimate Team growth would begin to stall.”

The end result of this is that EA’s stock price has been downgraded to $95 from $135 by him, and he has downgraded the rating from “Buy” to “Hold”. Of course, this is one analyst’s take, and it is entirely possible that EA reports record revenues, or something of that nature, and their stock prices hold steady anyway. But when even shareholders are beginning to worry about the company, you know things may not be as peachy as they once seemed.

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