Promotions for the week ahead: Electronic Arts still leads the way in games

Xbox owner Microsoft (ISFT) is in the process of buying Activision Blizzard (ATVI). Producer Grand Theft Auto Take-Two interactive (TWO) has already acquired mobile game developer Zynga.
Can EA remain independent as its peers continue to grow? There is also increasing competition from companies such as the mobile gaming company Metaverse. Roblox and producer of Fortnite Epic. Even Netflix (NFLKS) threw his hat into the gaming arena.
EA has many profitable franchises, such as the longtime Madden NFL games, the popular football series (which will soon lose its FIFA branding), Apex Legends, and several games related to the Star Wars universe.
And there’s been a lot of talk about EA being a good takeover target for wealthy tech and media companies like Apple (AAPL), Disney (DIS), Comcast (CMCSA)or Amazon (AMZN).

So, EA will finally buy? The company was not immediately available for comment.

But EA has been pursuing an acquisition on its own and may be looking for new deals, especially ones that could bolster its mobile gaming division. EA made two such acquisitions in 2021: Glu for $2.4 billion and Playdemic (previously owned by CNN’s previous parent company). AT&T (T)) for $1.4 billion.
Analysts at Goldman Sachs estimate that there is about a 15% chance that EA could be acquired, “given an increased level of video game M&A activity,” according to a recent report on the broader tech sector. It’s a small chance to be sure, but it’s greater than zero.

Analysts calculated a potential takeover valuation of $190 per share, which is “in line with recent video game deals.” That’s almost 50% above EA’s current share price.

That said, EA has enough quality content to stand alone for the foreseeable future.

Wells Fargo analyst Brian Fitzgerald noted in a report after EA released its latest earnings reports in May that a “robust pipeline” (more games from EA Sports, plus updates to The Sims, Lord of the Rings, and Bioware franchises), as well as “accelerating mobile growth” were positive for the stock.

So EA may not have to sell itself to a bigger company in order to stay competitive in the video game world.

Earnings from Nike and Walgreens on the giveaway

In the “season of income” there is a certain lull. Most major companies will report their second quarter results in mid-July. But some well-known companies, including two components of Dow, are ready to publish results this week.

Nike (NKE) will report his earnings after the call closes on Monday. The sneaker and sportswear giant’s shares have fallen nearly 35% this year.
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The company reported good results in March, but geopolitical concerns weighed on Nike shares. Analysts predict that Nike will report a decline in sales and earnings per share for the quarter. Nike also just announced it was pulling out of Russia due to its invasion of Ukraine.
walgreens (WBA) will also report results before the market opens on Thursday. Shares are down 20% this year, doubling a 10% drop from a competitor. CVS (CVS) but not as much as a drop of almost 45% for Rite of Help (GLAD).
It has been a challenging second year for Walgreens CEO Rosalind Brewer, who took the top job in March 2021.
Veteran executive who previously held leadership positions in walmart (TDC) as well as Starbucks (SBUX)deals with supply chain disruptions and fears of a slowing economy and weakening consumer demand, an issue that all retailers face. Wall Street expects revenue and net income to fall from last year.

Next

Monday: US durable goods orders; pending US home sales; earnings from nike, Jeffreys (JEFF) as well as trip.com (TKOM)

Tuesday: US consumer confidence

Wednesday: profit from General Mills (GIS), McCormick (ISS), Bed Bath and more (BBBI), Paychex (PAYMENT) as well as Patterson (PDKO)
Thursday: end of the second quarter; weekly US jobless claims; US PCE inflation; personal income and expenses in the USA; income from Walgreens, Constellation of brands (STZ) as well as Micron (Manchester United)

Friday: ISM production in the USA

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