UPDATE: JP Morgan Initiates OpenTable at Overweight on Yield Improvement Potential

JP Morgan initiated coverage on OpenTable

with an Overweight rating and a $53 price target. JP Morgan said, "We believe OpenTable's ~48% penetration of North American reservation-taking restaurants gives the company a sizable first-mover advantage. While we expect growth in NA restaurant adds to slow going forward, we expect growth in seated diners per restaurant to accelerate in 1H13 due to: 1) OpenTable's improvements to search results, mobile conversions, and deeper social integration should drive higher overall traffic and conversions; and 2) continued secular shift from offline (phone-based) reservations to online, which represents just 15-20% of all diner reservations. We believe the company is increasingly turning its investments and focus from restaurant adds to traffic and conversions." OpenTable closed at $46.94 on Tuesday.