Electtainment Arts (EA) has a good year

New York CNN Business Despite inflation fears, recession fears and other macroeconomic headwinds, Electronic Arts is having a good year. The shares of EA EA are only down about 2% in 2022, a drop that's not nearly as bad as the rest of the tech sector, which is now in bear market territory.

The gaming industry is concerned about EA's future as the gaming industry consolidates its focus on the gaming industry.

The owner of the Xbox is considering buying Grand Theft Auto maker, and has already picked up mobile game developer Zynga.

Will EA be able to remain independent as peers grow? There is also growing competition from the likes of Metaverse, the mobile gaming company Roblox and the Fortnite maker Epic. EA has a lot of lucrative franchises, such as the long-running Madden NFL games, a popular soccer series that will soon lose the FIFA branding Apex Legends and several games tied to the Star Wars universe.

Is EA going to be bought? The company was not immediately available for comment.

It is estimated that it is worth $1.4 billion. EA has been acquisitive in its own right and could be looking for more deals, particularly ones that could bolster its mobile gaming division. In 2021, EA made two such acquisitions, Glu for $2.4 billion and Playdemic formerly owned by the previous CNN parent for $1.4 billion.

Analysts at Goldman Sachs believe that there is a 15% chance that EA could be acquired, given the heightened levels of M&A activity within the video game space.

The analysts came up with a potential takeover valuation of $190 a share, which is consistent with recent video game transactions. That's nearly 50% more than the current stock price of EA.

EA has enough quality content to justify going it alone for the foreseeable future.

Wells Fargo analyst Brian Fitzgerald said in a report after EA's latest earnings came out in May that a solid pipeline more games from EA Sports, updates to The Sims, Lord of the Rings and Bioware franchises and accelerating mobile growth were positives for the stock.

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

Earnings from Nike and Walgreens are on tap.

There is a lull in the earnings season. Most major companies will report second quarter results in mid-July. Two Dow components are on tap for results this week, and there are some notable companies that are on the market.