), and raised its price target from $32.00 to $35.00. Bank of America noted, “CYOU continues its strategy of driving up ARPU of its existing hit TLBB, as the game user base has matured. ARPU of online games rose by over 50% in 2012, while webgame ARPC rose by more than 100% (from a low base). CYOU reduces spending from lower-spending users to maintain their interest in the game, in order to retain the high-end users. We believe this approach can deliver revenue growth in the near-to-mid-term, but can only be used to buy time for CYOU to launch new games in which it has started to invest. We don't expect any material PE re-rating due to limited long-term visibility. On the other hand, it still has a strong balance sheet (~US$8 in net cash), good cash flow (US$80m per quarter) and dividend potential. We move up our 2013E sales/EPS by 7%/ 8% after the better-than-expected 4Q12 and increase our PO moderately, to US$35, which is based on 6x 2013 EPS. We expect a ~5% dividend yield in 2013. We continue to value the webgame unit, 7Road, as an integrated part of CYOU until we have more details on the subsidiary's valuation in the disclosed potential spinoff.” Changyou.com Limited closed on Friday at $31.30.