Zynga shares rise on analyst upgrade
Shares of Zynga Inc. rose Tuesday to their highest level 18 months after a UBS analyst raised his investment rating on the online game maker's stock, saying that a recent acquisition will help the company grow.
Zynga, which makes games such as "FarmVille" and "CityVille," said last week that it was buying NaturalMotion, a mobile game maker, for $527 million.
UBS analyst Eric Sheridan said the acquisition will strengthen the company's mobile games business and NaturalMotion's successful titles, "CSR Racing" and "Clumsy Ninja," are a good fit for Zynga's business.
Sheridan upgraded Zynga to a "Buy" rating from "Neutral" and raised the stock's price target to $6 from $4.
Sheridan also said that Zynga is stabilizing under its new CEO Don Mattrick, who joined the company in July from Microsoft Inc.'s Xbox unit.
Zynga shares rose 3 cents to $4.51 in afternoon trading Tuesday after rising as high as $4.97 earlier in the day. That was its highest level since July 2012, according to FactSet. Its shares have lost more than half their value since their initial public offering price of $11 in December 2011.