UPDATE: Hudson Square Research Downgrades Groupon to Hold, Reiterates $12 PT

In a report published Friday, Hudson Square Research downgraded its rating on Groupon (NASDAQ: GRPN) from Buy to Hold, and reiterated its $12.00 price target.

Hudson Square noted, “We downgrade Groupon from Buy to Hold not because 3Q revenues fell short of expectations (earnings actually beat our forecast), but because we believe the aggressive push into direct sales creates 1) operational risks 2) lower margins, and 3) the potential for merchant partner conflict.”

Groupon closed on Thursday at $3.92.