JPMorgan analysts said they are encouraged by mobile gaming trends and expect spending on consoles to improve next year driven by a strong game slate.

The research firm updated its coverage on video game companies, including Roblox Corp. ( RBLX ) , Applovin Corp. ( APP ) and Electronic Arts Inc. ( EA ) ahead of their third-quarter earnings reports. 

Roblox ( RBLX ): JPMorgan pointed to Roblox ( RBLX ) as one of the firm's favorite names in the video game industry due to its combination of healthy engagement trends, ads/commerce business ramping and free cash flow seen as compounding at 30% through 2027. 

The analysts also highlighted data suggesting Roblox's ( RBLX ) daily active users (DAUs) are tracking above estimates and potential upside to third-quarter bookings. JPMorgan maintained its Overweight rating on Roblox ( RBLX ) shares and raised the price target from $50 to $51 ahead of its earnings release on Oct. 31. 

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Applovin ( APP ): JPMorgan highlighted Applovin ( APP ) as the leading in-app monetization platform for mobile gaming companies. The firm spoke with industry contacts who reported Applovin ( APP ) accounted for between 40% and 60% of their user acquisition spending. 

The analysts expect strong third-quarter results from the company due to stable growth in the mobile gaming industry, but remained neutral on the stock as the firm awaits evidence that Applovin ( APP ) can scale beyond gaming. The firm maintained its Neutral rating on Applovin ( APP ), but raised the price target considerably, from $57 to $160. 

Electronic Arts ( EA ): The firm pointed to EA's position as the largest pure-play game publisher in the industry that "increasingly favors scale and the largest IP" portfolio. The firm maintained its Neutral rating and $155 price target and said it is looking for "more consistent execution on non-sports titles" from the company. 

Electronic Arts ( EA ) will be the first from the group to report its quarterly results on Oct. 29 after the market close. The Street estimates the company will report earnings of $2.02 per share on revenue of $2.036 billion, according to data from Benzinga Pro.

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