UPDATE: J.P. Morgan Initiates Coverage on Dangdang with Neutral Rating, $4.30 PT

In a report published Wednesday, J.P. Morgan & Co. initiated coverage on Dangdang

with a Neutral rating and $4.30 price target. J.P. Morgan noted, “We initiate on Dangdang (DANG US) with Neutral and Dec-13 PT of US$4.3.Dangdang likely to see significant headwinds in transforming itself into a diversified platform, given strong competition. DANG's margins have already been dragged down due to competitors' entry and product mix shift, and we expect losses for DANG until 2015. We expect the stock to trade sideways until there is more clarity on profitability, and signs of winning share from competitors.” Dangdang closed on Tuesday at $4.00.