Stock week ahead: Electronic Arts is still the odd one out in gaming

Xbox owner Microsoft (MSFT) is about to buy Activision Blizzard (ATVI). Grand Theft Car Manufacturer Take-Two Interactive (TTWO) has already acquired mobile game developer Zynga.
Will EA be able to remain independent as its peers continue to grow? There is also increasing competition from such as the metaverse mobile game company Roblox and the Fortnite manufacturer Epic. Even Netflix (NFLX) has thrown his hat in the arena.
EA has many lucrative franchises, such as the long-running Madden NFL games, a popular football series (which will soon lose its FIFA brand), Apex Legends and several games related to the Star Wars universe.
And there has been a lot of talk that EA is a good takeover target for deep-seated technology and media companies such as. apple (AAPL), Disney (HAZE), Comcast (CMCSA)or Amazon (AMZN).
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So is EA finally bought? The company was not immediately available for comment.

But EA has been acquiring in itself and may be looking for more deals, especially those that can strengthen the mobile gaming division. EA made two such acquisitions in 2021, Glu for $ 2.4 billion and Playdemic (formerly owned by former CNN parent) AT&T (T)) for $ 1.4 billion.
Analysts at Goldman Sachs estimate that there is an approximately 15% probability that EA itself can be acquired, “given increased levels of M&A activity in the video game industry,” according to a recent report on the broader technology sector. There is a small chance of being safe, but it is greater than zero.

Analysts came up with a potential takeover value of $ 190 per share, which is “consistent with recent video game transactions.” It is almost 50% above EA’s current share price.

Nevertheless, EA has enough quality content to justify going it alone in the foreseeable future.

Wells Fargo analyst Brian Fitzgerald noted in a report after EA’s latest revenue came in May that a “solid pipeline” (more games from EA Sports, plus updates to The Sims, Lord of the Rings and Bioware franchises) as well as “accelerating mobile growth” were positive for the stock.

So EA may not need to sell itself to a larger company to remain competitive in the video game world.

Revenue from Nike and Walgreens at a loss

There is a clear break in the “earnings season”. Most large companies will report results for the second quarter in mid-July. But some notable companies, including two Dow components, are under pressure to release results this week.

Nike (OF) will report its earnings after the closing clock on Monday. The shares of the sneaker and sportswear giant are down almost 35% this year.
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The company reported solid results in March, but geopolitical concerns have weighed on Nike’s shares. Analysts predict that Nike will report a decline in sales and earnings per share for the quarter. Nike has also just announced that they are leaving Russia in light of the invasion of Ukraine.
Walgreens (WBA) will also report results before the market opens on Thursday. The shares are down 20% this year, double the fall of 10% for the rival CVS (CVS) but not as bad as the plunge of almost 45% Rite help (ADVICE).
It has been a challenging second year for Walgreen’s CEO Rosalind Brewer, who took the top job in March 2021.
The veteran chief, who previously had leadership roles at Walmart (WMT) and Starbucks (SBUX), deals with supply chain disruptions and concerns about a downturn in the economy and weakened consumer demand – a problem that all retailers face. Wall Street predicts that revenues and net income will fall from a year ago.


Monday: US durable goods orders; US pending home sales; revenue from Nike, Jefferies (JEF) and (TCOM)

Tuesday: US consumer confidence

Wednesday: Earnings from General Mills (GIS), McCormick (MKC), Bed Bath & Beyond (BBBY), Paychex (PAYX) and Patterson (PDCO)
Thursday: End of second quarter; weekly US unemployment claims; US PCE inflation; US personal income and expenses; revenue from Walgreens, Constellation Brands (STZ) and Micron (MU)

Friday: US ISM production

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