Lazard Capital’s Colin Sebastian has dropped his price target on EA from $58 to $55.
“While we continue to believe that EA will ultimately benefit from improving execution and better product momentum in 2HF2009, we believe ongoing margin pressures and lack of R&D leverage limit near-term upside in the shares,” said the analyst in a note this afternoon.
Sebastian did, however, raise his revenue estimate on the firm based on what appears to be strong demand for Spore.
“We are encouraged by solid game ratings of several new titles from EA, and there are positive early signals of interest for key F2Q release Spore, with roughly 1.4 million uploads to date
using the Creature Creator,” he said. “Based on solid quarter-to-date sell-through data (driven by Rock Band), we are increasing our F1Q revenue estimate slightly to $630M (+46% year-over-year) from $600M.”