Shares of Zynga Inc. climbed 2.3% in premarket trade Tuesday after the stock was upgraded to overweight from neutral at Piper Jaffray. Though the analysts still see mobile games companies as high risk, they say Zynga’s attention to live services and the company’s focus on cost containment, meaning maintaining existing games, rather than depending on producing new “mega-hits,” lower the risk of the investment. Additionally, the analysts say they have confidence in the company’s management team, most of whom came from Electronic Arts Inc. . The analysts see the executives following the same strategy as Electronic Arts, which they say was successfully able to turn its business around. The analysts increased their price target to $4 from $3. Shares of Zynga have gained 21% month-to-date, compared to the S&P 500’s gain of 1.3%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News