Live services acceleration offsets SW weakness
Remarkable growth in live services offset the well-understood weakness in SWBF2 in FYQ3, enabling EA to modestly raise FY18 EPS guidance. The results again highlight publishers' increasing ability to withstand disappointment in upfront game sales. FIFA has strong momentum heading into a World Cup year, such that FY19 estimates continue to look too low. We see a 24x forward PE as reasonable for a company well-placed to continue benefiting from the industry's strong secular tailwinds - we raise our 12-month price target to $140 and reiterate our Overweight stance.Electronic Arts develops, markets, publishes and distributes games, content and services that can be played and watched on a variety of platforms, including game consoles, personal computers, and mobile phones. The company markets and sells its games and services through digital distribution channels and through retail channels. Digitally, the company's console games and services can be purchased through third-party storefronts. In its games and services, the company utilizes brands that it either wholly own or license from others. The company develops and publishes games and services across genres. Within and alongside its games, the company provides live services, including in-game purchases, downloadable content, and esports.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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