Stock in browser games giant buoyed by launch of games platform and prospects of entering online gambling
Browser games giant Zynga has been downgraded after shares in the company rose to around $15.
As reported by the Financial Post, JP Morgan analyst Doug Anmuth downgraded shares in the company from ‘overweight’ to ‘neutral’ after Zynga shares soared due in part to the launch of its own games portal away from Facebook.
Anmuth said that Zynga shares were "now essentially at our $15 price target", adding that it would likely stay around that point until the company's new ventures are fully realised.
The FarmVille developer's CEO Mark Pincus also recently claimed the company would be interested in entering the online gambling market if it were legalised in the US, raising prospects for the firm’s shares in the process.
Zynga had iniitially struggled somewhat with its stock price after launching its IPO, hovering around $10 per share in December.
“We are also positive on these fronts, but we believe some of the potential upside is now being factored into the stock and it will likely take some time for both online gambling and Zynga.com traction to materialise,” said Anmuth.
“Zynga shares are fairly valued and could be range-bound in the near-term until we see greater clarity around the strength of newer games and their ability to increase both users and players.”