Needham & Company Downgrades JAKKS Pacific (JAKK) to Hold, Cautious into Holidays

Needham & Company downgraded JAKKS Pacific (NASDAQ: JAKK) from Buy to Hold saying they are more cautious as holiday season approaches and retail toy sales remain weak and takeover potential is fading.

"Our price target on JAKK was $20, a price we expected by late 2013," the firm comments. "The shares, up 17% YTD, are well below that target, but we are increasingly concerned about industry sales, and particularly about JAKK's ability to meet our estimates in the wake of the stalled sales of Monsuno. With retail sales continuing to be weak, and consumers possibly “distracted” until after the election, we are downgrading to Hold ratings on all toy stocks we cover. In addition to industry-wide concerns (detailed in a separate note, and summarized herein), we also note that Hasbro is likely vulnerable to slow sales of games, girls’ toys and preschool toys, whereas boys’ toys have generally been stronger. We are maintaining our EPS estimates, but believe the potential for negative surprise has been rising."

For an analyst ratings summary and ratings history on JAKKS Pacific click here. For more ratings news on JAKKS Pacific click here.

Shares of JAKKS Pacific closed at $16.25 yesterday.

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