UPDATE: Bank of America Merrill Lynch Reiterates Neutral Rating, Raises PT on Giant Interactive Group
In a report published Wednesday, Bank of America Merrill Lynch reiterated its Neutral rating on Giant Interactive Group (NYSE: GA), and slightly raised its price target from $6.00 to $6.80.
BofA Merrill Lynch noted, “Due to the concern on the impact from webgames and mobile games on traditional client-based games, we believe many investors would feel the lack of longer term visibility and hence would focus on near-term trends of various game companies in investment, as we wrote in our earlier industry report. On Giant, we are encouraged to see the near term momentum in ZT2, which is estimated to represent 48.8% of 4Q12 revenues and to grow to 50.2% of 2Q13 revenues. This should help to offset the maturing ZT. Hence, our 13E &14E earnings estimates are revised up by 10% respectively. We fine tune our PO to US$6.8 (from US$6.0), implying 7.0x 13E and PEG of 1.0 on 7% earnings growth in 13-14.”
Giant Interactive Group closed on Tuesday at $6.35.
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