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Electronic Arts Falls, Take-Two Rises on Quarterly Results

Analysts weigh in as videogame competitors EA and Take-Two report earnings.

Electronic Arts  (EA) - Get Electronic Arts Inc. Report was sliding and Take-Two Interactive  (TTWO) - Get Take-Two Interactive Software, Inc. Report was higher after analysts weighed in on the videogame rivals following their quarterly earnings reports.

Shares of EA, the Redwood City, Calif., producer of videogames like "Battlefield," "The Sims" and "FIFA," at last check were down 8% to $118.04.

EA said fiscal-second-quarter revenue declined 15% to $1.15 billion and the company provided a weaker-than-expected revenue outlook for the third quarter and fiscal 2021.

Take-Two, the New York publisher of "Grand Theft Auto" and "NBA 2K," was up 4.1% to $175.64. The company said second-quarter earnings were up 37%

Morgan Stanley, which has an equal-weight rating on Electronic Arts, cut its price target on the stock to $140 from $145, saying the company's weaker-than-expected sales and forecast “speak to greater-than-expected player and payer churn within EA’s core franchises.”

 Piper Sandler analyst Yung Kim downgraded EA to neutral from overweight and cut his price target to $133 from $157. Kim said the company's outlook for the December quarter “did little to inspire.”

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  While Kim said EA has a "top-flight portfolio," the analyst said the recent results indicated near-term catalysts and growth in fiscal 2022 are unclear.

On the other hand, JPMorgan analyst Alexia Quadrani said the post-earnings selloff in EA shares brings them to an attractive entry point.

She said the results were "mixed" and management remained cautious on the outlook given uncertainties in the economy as coronavirus cases rise in many parts of the world. She reiterated her overweight rating with a $155 price target.

Meanwhile, Barclays analyst Mario Lu raised his price target on Take-Two Interactive to $210 from $196, while affirming an overweight rating on the shares following the company's fiscal-second-quarter results.

Kim from Piper Sandler cut his price target on Take-Two to $186 from $200, while keeping an overweight rating on the shares.

He said that Take-Two's fiscal 2021 title lineup "has been sparse and shelter-at-home regulations unpredictable," but the combo of "NBA 2K" and "GTA" offset weakness elsewhere.

Take-Two is a holding in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells TTWO? Learn more now.