UPDATE: Piper Jaffray Upgrades Green Dot Corporation on Multiple Positive Factors

In a report published Tuesday, Piper Jaffray analyst Michael J. Grondahl upgraded the rating on

from Neutral to Overweight, and reiterated the $26.00 price target. In the report, Piper Jaffray noted, “After the recent 20% pullback, we believe GDOT shares are poised for outperformance. We believe concerns over AXP's Serve and Walgreen's private label products are overdone. We believe WMT (65% of revenues) is expanding its relationship with GDOT by offering a wider card selection instead of forcing GDOT to lower reload fees. We believe GDOT's investment of $12-$15M for these new cards in 2H13 is positive for this WMT initiative. Lastly, we believe the total strategic investments of $27-$34M in 2H13 can be spread over 3Q and 4Q so GDOT can at least achieve its guidance; as such we are buyers into Thursday's PM earnings release and are upgrading shares to Overweight. We also believe 2014 will be a strong year for GDOT and remain ~$0.24 above the Street. Our price target is $26 based on 13x 2014E adj. EPS + $5.45 per share of cash equivalents.” Green Dot Corporation closed on Monday at $20.00.