Electronic Arts (EA) stock was down on Thursday following reports the video game developer and publisher laid off some of its staff. The company reportedly closed down subsidiary Cliffhanger Games, which was developing a video game featuring Disney (DIS) and Marvel’s Black Panther.
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It’s unclear how many employees were laid off after Cliffhanger Games was closed. EA often shifts employees of closed studios to other projects, and this may have happened to some of Cliffhanger Games’ staff.
With the closure of Cliffhanger Games comes the cancellation of the Black Panther game. Not many details were known about this game. However, reports claimed it would be similar to Warner Bros’ (WBD) The Lord of the Rings game, Shadows of Mordor. That would make sense as Cliffhanger Games included employees from Monolith Productions, the developers of Shadows of Mordor.
What This Means for EA Stock
The closure of Cliffhanger Games is another blow to Electronic Arts, which is undergoing a period of transformation. The video game developer has struggled recently with games such as Dragon Age: The Veilguard not meeting expectations.
Recent analyst coverage also remains tepid. Five-star Citi analyst Jason Bazinet maintained a Neutral rating for the stock today, but increased his price target to $153 from $139, suggesting a 6.29% upside.
Today’s news has EA stock down 1.97%, extending its 1.32% drop year-to-date. However, the shares remain up 11.93% over the past 12 months.
Is EA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Electronic Arts is Moderate Buy, based on nine Buy and 11 Hold ratings over the last three months. With that comes an average EA stock price target of $168.83, representing a potential 17.39% upside for the shares.
