UPDATE: Piper Jaffray Downgrades Zynga to Neutral

Piper Jaffray has published a research report on Zynga

and downgraded the company from Overweight to Neutral after market close on Tuesday. In the report, Piper Jaffray wrote, "We are downgrading shares of ZNGA to Neutral amid incremental evidence that the y/y bookings declines expected in '12 will continue at a steeper pace in '13 (consensus estimates suggest a modest 2% y/y bookings decline in '13). Social gaming has been adversely impacted by weakening fundamentals, including declining daily active users, low engagement and deteriorating monetization trends. We recently surveyed >7,700 teens with questions on social gaming interest and purchase behavior. Results confirm that social gaming is as unpopular among teens as we have ever seen in our survey. While we acknowledge teens are not the core social gaming demographic, results nonetheless demonstrate a deterioration in the category that is likely to persist for several quarters, or longer." Piper Jaffray maintained its $3 price target on Zynga, which is currently trading down 4.52 percent from Tuesday's 2.44 closing price.