UPDATE: Bank of America Raises PT on Perfect World Ahead of New Game Launches

In a report published Wednesday, Bank of America analyst Eddie Leung reiterated a Buy rating on Perfect World PWRD, and raised the price target from $12.20 to $14.00.

In the report, Bank of America noted, “After continued revenue decline on maturing old games and shortage of new game launches in the past 12-18 months, co finally expects a rebound in sales in 2Q13, reversing a downtrend in past three quarters on new games: Neverwinter in the US/Europe, Saint Seiya in China and several web games and mobile games. Also, co. has managed to keep the expenses under control (OPM at 21%), while waiting for new game launches. And thus, we are revising up our 2013/14 sales forecast by 2.7 / 3.3%, and net income by 7.8 / 8.9% respectively. Hence our PO is revised up to $14, based on net cash of US$8.0 and 6x of 13E EPS of US$0.96, implying PEG 1.0 of 13-14 EPS growth. With over half of its market cap in net cash, stock is trading at 5x ex-cash PE, we see limited downside.”

Perfect World closed on Tuesday at $12.94.