Goldman Sachs analyst Eric Sheridan initiated coverage of 10 companies across the interactive entertainment sector.
Sheridan downgraded Electronic Arts Inc (NASDAQ:EA) to Neutral from Buy with a price target of $145, down from $183 (18.7% upside).
With a newly appointed CFO and estimates below the Street in the coming years, Sheridan is looking for greater clarity on EA's growth and margin trajectory over the long term. However, he sees EA as a fast-growing company with long-term margin potential and well-positioned to take market share.
Sheridan downgraded Ubisoft Entertainment (OTC:UBSFY) to Sell from Neutral with a price target of EUR 40, down from EUR 52.
Sheridan expects Ubisoft will continue to invest in the near-to-medium term to position its portfolio of games for sustained growth amidst an evolving market.
Sheridan downgraded Playtika Holding Corp (NASDAQ: PLTK) to Neutral from Buy with a price target of $22, down from $27 (16.5% upside).
Sheridan views Playtika's risk/reward as equal as investors measure the company's mobile growth versus its strategic alternatives.
Sheridan assumed coverage of ironSource Ltd (NYSE:IS) with a Buy rating and price target of $7, down from $12 (55.2% upside).
ironSource is an ad tech and business software platform serving app developers and telecom operators. He sees the company as structurally well-positioned, benefiting from "favorable market shifts," new product innovation, and its publishing arm Supersonic.
Sheridan assumed coverage of AppLovin Corp (NASDAQ:APP) and SciPlay Corp (NASDAQ:SCPL) with a Buy.
Sheridan assumed Zynga Inc (NASDAQ:ZNGA) and Take-Two Interactive Software Inc (NASDAQ:TTWO) with a Not Rated rating. Sheridan downgraded Roblox Corp (NYSE: RBLX) to Neutral from Buy.
Price Action: EA shares traded lower by 1.19% at $120.71 in the premarket on the last check Tuesday.
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