Goldman Sachs, Electronic Arts & Conviction Buy (ERTS, TTWO)

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Goldman Sachs is making an aggressive call on Electronic Arts, Inc. (NASDAQ: ERTS) in the video game sector this morning. The brokerage firm has added Goldman Sachs to its CONVICTION BUY LIST.  It sees over 20% upside to its $60.00 price target based upon the $49.69 price yesterday. 

The research note also indicates that shares are still down 10% from when it was initiated in coverage last year due to poor execution and loss in market share during a record 2007.  It notes a 14 new title slate of games coming in the Summer to Fall line-up and actually sees clarity around the buyout offer for Take-Two Interactive Software Inc. (NASDAQ: TTWO).

The long-term appreciation is still predicated on top-line growth and margin expansion as it capitalizes on the new consoles in the marketplace. 

There are hardly any trades that have gone off this morning, but so far shares are indicated up at $52.00 in pre-market trading.

Jon C. Ogg
March 25, 2008

Jon Ogg produces the Special Situation Investing Newsletter and can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.