UPDATE: Piper Jaffray Upgrades Electronic Arts to Overweight on Compelling Margin Opportunities

In a report published Tuesday by Piper Jaffray, analyst Michael Olson upgraded Electronic Arts Inc. (NASDAQ: EA) from Neutral to an Overweight rating while increasing its price target from $20 to $23.

Olson concluded, "We are upgrading EA to OW based on several factors: 1) weak Dec & Mar quarters behind us, 2) CEO transition, 3) clarity around next gen consoles, 4) launch of Battlefield 4 in Dec quarter, 5) expectation for expanding op margins, and 6) the 2014 FIFA World Cup. We downgraded EA in January based on expectations for weak fundamentals in the Dec & Mar quarters; results have proven to be weak, but the stock has moved higher. Since then changes relating to many of the factors above have led us to believe the risk/reward for EA shares is more attractive. We believe Street FY14 op margins may prove conservative and while FY15 will have tough comps, the FIFA World Cup will be an offsetting positive."

EA closed Monday at $17.56.




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