Wedbush analysts have doubled down on backing for Electronic Arts Inc (NASDAQ:EA, ETR:ERT) (EA) after the video game maker upped full-year guidance on record second-quarter net bookings.
“EA is beginning to deliver solid earnings growth through a combination of improving revenues and the operating leverage that comes as a result,” Wedbush said following results on Tuesday.
EA had lifted net bookings guidance to a range of $7.5 billion to $7.8 billion, from between $7.3 billion and $7.7 billion previously.
This followed a 14% jump in net bookings to a record $2.08 billion over the quarter on growth of the likes of its American football and ‘Sims’ titles.
Wedbush noted the improvement came despite an estimated $250 million drop in revenue from its ‘Apex Legends’ title against last year, as mobile sales also fell.
“The good news is that even with [this] EA is managing to grow its overall bookings,” Wedbush analysts wrote.
EA’s launch of ‘Dragon Age Veilguard’ should help it reach the higher bookings target, analysts continued.
“We expect EA to ultimately regain traction in mobile, particularly in the sports and racing genres,” Wedbush added.
Though no firm dates have yet been set for the latest releases in EA’s ‘Battlefield’, ‘Black Panther’, ‘Iron Man’ and ‘Star Wars’ franchises, ongoing share buybacks should also buoy earnings ahead.
Analysts reiterated their ‘outperform’ rating and hiked EA’s share price target from $170 to $173.
Shares climbed by 3% to $150.02 on Wednesday.