Electronic Arts: Widespread Downgrades; Is It a Target?

Electronic Arts (ERTS) shares are being pounded today following the company’s guide-down for its March 2009 fiscal year. The stock was downgraded by, well, almost every analyst who follows it, which of course doesn’t help anyone who owned the stock as of yesterday’s close. The general consensus is that EA has simply been producing games that not many people want to buy; there is a fair amount of cheering from the sidelines about how this is not an industry problem, and demand for videogames overall remains just fine. But the skeptics think this is not entirely right, that however bad the current EA lineup is, there are additional pressures coming from the weakening economy, with retailers cutting inventory in the face of tighter credit conditions.

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