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Needham & Company Upgrades LeapFrog (LF) to Strong Buy; 3Q Results Jump Estimates, As LeapPad’s Brisk Intro Drives Sales

November 2, 2011 7:50 AM EDT
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Price: $1.00 --0%

Rating Summary:
    2 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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Needham & Company upgraded LeapFrog (NYSE: LF) from Buy to Strong Buy with a price target of $6.00.

Needham analyst says, "LF reported 3Q results well ahead of our estimates, with sales up 9% compared to our estimate of a 2% increase, and EPS of $0.35, better than our $0.27 estimate. The sales surge was led primarily by LeapPad, a new tablet platform launched over the summer, which has met with very favorable retailer and consumer response. Management upped its sales and EPS guidance modestly, recognizing the upside in the quarter, but tempering the enthusiasm with a realistic view of the economy and potential supply constraints. We have raised our sales and EPS estimates for 2011 to be above the top end of management’s guidance, but have left our 2012 and 2013 estimates unchanged. We have upgraded our rating as we are now more confident that surprises are likely to be positive."

For more ratings news on LeapFrog click here and for the rating history of LeapFrog click here.

Shares of LeapFrog closed at $3.77 yesterday.


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