Groupon Inc (NASDAQ:GRPN) has struggled to reinvent itself as the daily deals business has declined, but analysts at one firm believe the company is on the right track. In fact, they’ve even increased their price target and earnings per share estimates for the company, although they remain neutral on the stock.

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In a report issued to investors today, analysts at Macquarie examined Groupon Inc (NASDAQ:GRPN)’s Dealbank initiative. They said the company’s goal of becoming a source of local deals that’s “always on” is the correct one, but they admit that it won’t be easy.

The company is working on taking its vision global and also moving its deal distribution away from email. They believe Groupon Inc (NASDAQ:GRPN)’s first step will be to increase how many active deals are available in each market to more than a thousand. In order to gauge the company’s progress, they looked at the company’s deal counts in the top 50 U.S. markets and a few international markets. They said so far, they believe Groupon is “successfully scaling” its Dealbank initiative within the U.S., although internationally, its growth is minimal.

The analysts found almost 30,000 deals spread across the top 50 cities in the U.S. with an average of almost 600 deals per city. The highest number of deals was available in Chicago, where the company is headquartered and there were more than 1,700 deals. However, its smallest market was Virginia Beach, Va., where it had just 10 deals. They found that 52 percent of the top 50 markets had at least 500 active deals.

They called the marketplace UI “relatively pervasive in the U.S.,” complementing the company’s marketplace feel for the city-specific destination sites. They also liked the search functionality and the browsing ability of the sites.

The analysts said if Groupon is going to succeed, it “will need consumers to view it as a destination marketplace where demand can be fulfilled by browsing local deals” rather than having the deals delivered via email. They said paid search could help, but their checks indicate “very little use of transaction-oriented keyword ads” by the company thus far.

Macquarie analysts raised their 2013 / 2014 earnings per share by 2 percent and 3 percent respectively and their price target to $5.50 per share from $4 per share.

Shares of Groupon Inc (NASDAQ:GRPN) fell more than 1 percent in Wednesday afternoon trades.

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