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KeyBanc Initiates Coverage on Hasbro (HAS), Mattel (MAT) & JAKKS Pacific (JAKK)

June 15, 2009 5:34 PM EDT
HAS Hot Sheet
Rating Summary:
    2 Buy, 5 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 7 | New: 23
KeyBanc initiates coverage on Hasbro, Inc. (NYSE: HAS) & Mattel, Inc. (NYSE: MAT) with a BUY rating and JAKKS Pacific, Inc. (NASDAQ: JAKK) with a HOLD rating.

KeyBanc analyst says, "We are initiating coverage of HAS with a BUY rating and establishing a 12-month price target of $32 per share, which, combined with a 3.2% dividend yield, represents a compelling total return of approximately 30% over the next year. In addition, we are introducing 2009 and 2010 earnings estimates of $2.05 per share (First Call Consensus $2.13) and $2.15 per share (First Call Consensus $2.23), respectively. Based upon our 2010 estimates, HAS is currently trading at a P/E multiple of 11.7x and an EV/EBITDA multiple of 5.5x."

"We are initiating coverage of MAT with a BUY rating and establishing a 12-month price target of $20 per share, which, combined with a 4.6% dividend yield, represents a compelling total return of roughly 27% over the next year. In addition, we are introducing 2009 and 2010 earnings estimates of $1.20 per share (First Call Consensus $1.18) and $1.45 per share (First Call Consensus $1.40), respectively. Based upon our 2010 estimates, MAT is currently trading at a P/E multiple of 11.3x and an EV/EBITDA multiple of 6.6x."

"We are initiating coverage of JAKK with a HOLD rating. In addition, we are introducing 2009 and 2010 earnings estimates of $1.75 per share (First Call Consensus $1.73) and $1.80 per share (First Call Consensus $1.91), respectively. Based upon our 2010 estimates, JAKK is currently trading at a P/E multiple of 7.2x and an EV/EBITDA multiple of 3.1x. Our neutral disposition on JAKK is premised upon our belief that several earnings overhangs exist, including slowing growth in the core product portfolio, uncertainty regarding the integration of recent acquisitions, the loss of a key toy license beginning in 2010 and the potential for lower income from a video game joint venture, all of which could limit meaningful upside in the shares over the near term."

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