UPDATE: Piper Jaffray Upgrades Hot Topic to Overweight on Growth Outlook

Piper Jaffray raised its rating on Hot Topic (NASDAQ: HOTT) from Neutral to Overweight and reiterated its previous $11 price target.

Piper Jaffray commented, "We are upgrading shares of HOTT from Neutral to Overweight based on attractive valuation, increased confidence in estimates, and a shift in our investment rationale from recovery to growth. On its Q3 report, the company detailed accelerated square footage growth plans for 2013, which was the catalyst we were seeking to revisit our thesis. In addition, margin initiatives are taking hold at a faster pace than initially modeled, lending to further profitability expansion. We expect a series of Street interactions over the next few months to add to visibility and confidence in underlying operating stability and growth."

Hot Topic closed at $8.56 on Wednesday.

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