BMO Capital Markets Downgrades Electronic Arts on Slashed Bookings Forecast
BMO Capital Markets has downgraded Electronic Arts Inc (EA) to Market Perform from Outperform and cut its target price to $145.0 from $160.0 after the videogame company slashed its annual net bookings forecast. The downgrade comes as EA’s flagship titles, including Dragon Age: The Veilguard and College Football 2025, have missed internal sale forecasts, and its flagship Football Cup franchise is expected to experience a mid single-digit decline in bookings for fiscal 2025.
EA’s net bookings forecast for fiscal 2025 was cut to a range of $7 billion to $7.15 billion from a prior forecast of $7.5 billion and $7.8 billion. The company’s December quarter earnings per share is forecast to be $1.11, in line with guidance, but its bookings guidance for the quarter has been cut. The downgrade highlights EA’s struggle to diversify its business beyond sports games, which have been a major earnings driver, but are facing intense competition from American and Japanese companies.
BMO noted that the momentum in EA’s Football Cup franchise has run dry following the conclusion of several major international soccer events in 2024, and the company is headed for an uncertain fiscal 2026 due to doubts over its lineup and increased competition, including the upcoming launch of Take-Two Interactive’s GTA VI in 2025.
