UPDATE: Piper Jaffray Downgrades Hot Topic to Neutral; Limited Upside from Acquisition Bid

Piper Jaffray downgraded Hot Topic HOTT from Overweight to Neutral and maintained a $14.00 price target. Piper Jaffray analyst Stephanie S. Wissink noted, "We are tidying up our model and rating following the FQ4 report in which EPS was modestly better at $0.29 when compared to recently revised estimates at $0.27. Shares will continue to trade at the announced take-out price of $14/share until the deal closes in the next 1-2 quarters. Even if a second bidder were to emerge, we think the premium to the current offer would be modest, justifying our downgrade to Neutral. Management did not take Q&A on its conference call but did make mention of a few interesting trends worth noting. Sales & margins improved at both concepts, apparel continues to outpace accessories, and basket size (not traffic) has been the key driver of comp." Hot Topic closed at $13.84 on Wednesday.