Electronic Arts(US:EA) HTSC·2025-05-13 07:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of $184.60 [6][13]. Core Insights - The company's performance has rebounded, particularly due to the updates to the "FC" series and the release of new titles like "Split Fiction" [1][2]. - The company is expected to benefit from a strong product pipeline, including the anticipated release of "Battlefield 6" and the upcoming 2026 Summer World Cup, which is expected to positively impact the "FC" series [3][4]. Financial Performance - For FY25Q4, the company reported net revenue of $1.895 billion, exceeding consensus estimates by 7.6% and showing a year-over-year increase of 6.5% [1]. - Net bookings for the same quarter reached $1.799 billion, surpassing expectations by 14.9% and reflecting an 8% year-over-year growth [1][2]. - The net profit for FY25Q4 was $254 million, exceeding expectations by 12.2%, driven by an increase in digital game sales and operational leverage [1]. Future Guidance - The company has provided guidance for FY26 net bookings to be between $7.6 billion and $8.0 billion, primarily driven by new releases and the continued recovery of the "FC" series [2]. - The expected release of "Battlefield 6" is projected for the end of FY26, with management noting significant engagement from early testing [3]. Earnings Forecast and Valuation - The report adjusts FY26 and FY27 net revenue estimates down by 9.1% and 4.3% to $7.262 billion and $8.176 billion, respectively, while introducing a FY28 forecast of $8.43 billion [4][11]. - Net profit estimates for FY26 and FY27 have been reduced by 37.7% and 13.5% to $956 million and $1.417 billion, respectively, due to increased R&D and marketing costs associated with new game releases [4][11]. - The valuation multiple has been increased to 50x PE, aligning with industry averages, reflecting a robust product pipeline and potential profit recovery post new releases [4][13].