Security has tightened both a target hike and a cut this morning
The shares of Electronic Arts Inc. (NASDAQ: EA) battling for direction this morning, most recently up 0.3% to $ 141.84 after the video game company posted better-than-expected fourth-quarter earnings of $ 1.23 per share – higher than Wall Street estimates of 1.05 USD per share – as well as reported sales had hit. In addition, the company released an upbeat annual adjusted sales forecast as it was optimistic that demand for the titles “FIFA 21” and “Apex Legends” will remain strong even if the economy reopens.
The brokerage group already agrees with the results. Specifically, Credit Suisse lowered the security’s price target to $ 165 while the benchmark and UBS rose to $ 181 and $ 175, respectively. This reflects mixed analyst sentiment on the stock, with 11 of the 21 reporting EA rating it as “Buy” or better, while 10 have a lukewarm “Hold” rating. The 12-month consensus target of $ 161.88 represents a 14.5% premium over the stock’s current perch.
The stock has been volatile on the charts for the past 12 months. Shortly after rising to a two-year high of $ 150.30 on Jan. 25, stocks fell to the $ 127 level. Electronic Arts stock has since regained support of the 40-day moving average, which included several of its recent pullbacks. EA is up 21.5% year over year.
Security could benefit from a shift in the bearish option pits. This corresponds to the stock’s 10-day put / call volume ratio on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX), which is higher than all but 9% of the readings from the past year.
With that in mind, Electronic Arts stock’s Schaeffer put / call open interest ratio (SOIR) of 1.83 is at the highest percentile of the annual range, meaning that short-term options traders have rarely been more put-biased.
6,383 calls and 4,902 puts have already crossed the band, ten times what is currently commonly seen. The most popular is the weekly 5/14 call with 150 strikes, followed by the June 140 put.