Electronic Arts Inc. (NASDAQ:EA) will see significant upside in coming years due to its Netflix-like approach to video game subscriptions.
That’s according to one prominent Wall Street analyst, who reaffirmed her bullish rating and outlook for the stock this week. CNBC has more details:
Needham reiterated its buy rating for EA shares, saying its subscription business is already worth $3 billion to the company.
“We believe that EA is building a Netflix for video games,” analyst Laura Martin said in a note to clients Friday. “It is our view that millennials want to rent content (eg, Spotify, Pandora, Netflix, Hulu) rather than own it, and that content companies with data about what their consumers view/play/use create valuation upside from programming, eCommerce, and advertising revenue streams.”
Martin also lifted her price target on EA to $170 from $135, suggesting a 19% upside from current levels.
EA’s latest subscription service, dubbed “Origin Access Premier,” is priced at $14.99 per month or $100 per year for PC gamers, and offers access to EA’s biggest games as soon as they’re launched.
Electronic Arts Inc. shares closed at $141.26 on Friday, down $-1.89 (-1.32%). Year-to-date, EA has gained 34.46%, versus a 3.83% rise in the benchmark S&P 500 index during the same period.