UPDATE: Jefferies Raises Target on hhgregg to $12.50

Jefferies maintains its Hold rating on hhgregg

and raises its price target by half a dollar to $12.50 ahead of Q4 release, which should look better in the context of a bad Q3. Jefferies says, "A promotional holiday season pressured gross margin and investments in advertising was not enough to yield big sales gains as TV cycle tried to find a bottom. We anticipate less margin erosion in Q4 after a peak in promotions this holiday. Revising Q4 EPS up to reflect this." HGG closed at $11.34 a share on Thursday.