UPDATE: Bank of America Downgrades Zynga to Neutral on Risk/Reward

Bank of America downgraded Zynga

from Buy to Neutral and maintained a $3.90 price objective. Bank of America analyst Justin Post noted, "We see less valuation upside from here and are moving our rating to Neutral from Buy as the stock better reflects the L.T. potential value of core businesses (Poker/Mobile/Ville). In our Internet year-ahead report, we highlighted the opportunity for 2011/2012 IPOs to recover in 2013 and ZNGA has outperformed the market YTD (up 47% YTD vs. up 9%), but we think competitive real-money poker launches and summer seasonality on core businesses could limit further enthusiasm. The only driver of meaningful earnings surprise in 2013, in our view, is with a hit new social PC game, which is unlikely and difficult to predict. Our PO remains $3.90." Zynga closed at $3.47 on Tuesday.