Electronic Arts upgraded to “Buy” at Roth Capital

Roth Capital Markets analyst Eric Handler upgraded Electronic Arts (Electronic Arts Stock Quote, Chart, News, Analysts, Financials NASDAQ:EA) to “Buy” from “Neutral” in a June 24 report, citing stronger confidence in the company’s ability to deliver double-digit EPS growth over the next three years. He raised his 12-month price target to $185 from $175, based on 22 times projected FY2026 earnings.

“Sports remains a blue-chip cornerstone for the company’s growth story, but a successful release of a new Battlefield game could materially change investor sentiment,” Handler said. “We are raising our FY26 estimates above the high-end of guidance (and consensus) and expect solid carryover/new initiatives will fuel another strong growth year in FY27.”

He said EA is at a key turning point that positions the company for strong, multi-year growth.

“Fueling this story is ongoing LSD-MSD growth from key sports titles, which will be complemented over the next several years by a new Battlefield game, the introduction of new variations of The Sims, and a handful of other games, including Skate and Star Wars: Zero Company,” he said.

However, Handler said that after three years of flat performance — bookings declining at a 1% CAGR and EPS growth driven mainly by interest income and buybacks — investors remain cautious. EA shares have tracked the S&P 500 over the past year, reflecting that wait-and-see sentiment. The key near-term catalyst for outperformance is a successful fall launch of the next Battlefield title, a franchise that underperformed with its last two releases.

Handler believes recent changes in Battlefield’s development over the past 3–4 years have positioned the series for a strong comeback.

“Many changes for the better have been made to Battlefield development in the last four years,” Handler said. “Following the disappointing launch of Battlefield 2042 in October 2021, Vince Zampella, the well-regarded head of Respawn Studios, was put in charge of the Battlefield franchise. Teamed up with former Call of Duty general manager Bryan Beede (now SVP and GM for Battlefield), the entire process for Battlefield has been revamped.”

EA now has four internal studios working on the new Battlefield game, up from just one for Battlefield 2042, and development time has doubled. The game has been playable for some time, with playtesting starting in early 2025, beginning earlier than for any prior Battlefield title. EA is expected to deliver both single-player (absent in Battlefield 2042) and multiplayer modes in a potential fall launch. Recently leaked playtest feedback has been positive, and an official announcement is expected this summer.

Handler said he’s raising his fiscal 2026 estimates for Electronic Arts based on a stronger outlook for the upcoming Battlefield launch. He now forecasts full-year bookings of $8.03-billion, up 9% from his prior estimate of $7.95-billion, and EPS of $8.42, up 19% from $8.35. The updated forecast includes expected Battlefield unit sales of 8-million at launch in Q3 FY26 and 10-million for the full year, up from previous estimates of 6.5-million and 8-million, respectively.

“Our higher forecast is modestly above the high end of management’s bookings and EPS guidance of $8.000bn and $8.40, respectively, and is well above consensus at $7.801bn and $8.14,” he said.

Handler said fiscal 2027 also offers strong growth potential, with financials not expected to peak until fiscal year 2026. Growth drivers include a full year of live services for Battlefield, a “milestone moment” for EA FC following the World Cup with new monetization and gameplay features, and the likely release of the next-gen Sims game, Project Rene. He projects FY27 bookings of $8.43-billion and EPS of $9.60, both above consensus estimates of $8.27-billion and $8.98.

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