UPDATE: Bank of America Lowers PT on Zynga on Weak 2Q Bookings

In a report published on Tuesday, Bank of America analyst Justin Post lowered the price target on Zynga ZNGA from $3.80 to $3.60 and reiterated an Underperform rating. In the report, "Zynga pre-announced weak 2Q results and now expects bookings at the low-end of its outlook of $180-190mn vs. our $200mn prior estimate (2Q revenue and EBITDA guidance is unchanged). Zynga also announced plans to close studios and cut its headcount 18% (520 employees) which should lower annual OPEX $70 80mn (re-org completed by Aug). While stock has asset value support, we are maintaining our Neutral rating as the current titles are losing users and we have little visibility on upcoming titles. Read-across for Facebook's 2Q payment revenues is slightly negative ($3-5mn possible impact), although we think Zynga continues to lose share on the Facebook platform." Zynga opened on Tuesday at $3.08.