UPDATE: Citigroup Initiates Buy, $32.90 PT on Changyou.com on Diversified Approach

Citigroup initiated its coverage on Changyou.com

with a Buy ring and and a price target of $32.90. Citigroup noted, "Changyou has developed a strong position to expand in the online gaming market, especially web games and mobile games. We view positively its diversified approach toward building product strongholds in MMOGs, web games, game vertical (17173.com), and game platforms. Our DCF-based TP of US$32.90 implies 5.4x 2013E nonGAAP EPADS and 38% upside potential from current levels. We believe that with successful diversification of its game product lines, Changyou could be re-rated." Changyou.com closed at $24.39 on Monday.