UPDATE: BMO Capital Markets Downgrades JAKKS Pacific to Underperform on Current Overvaluation

In a report published Wednesday, BMO Capital Markets downgraded its rating on JAKKS Pacific

from Market Perform to Underperform, and lowered its price target from $12.00 to $7.00. BMO Capital Markets noted, “We believe the shares are currently overvalued, and we do not have much confidence in the forward estimates that this valuation is based on. We are concerned about possible deterioration in sales and earnings coming from poor product performance, loss of business to competitors, an inability to create protectable brands, and the departure of key talent. We are reducing our 2013 EPS estimate to $0.55 from $0.60. We are initiating a 2014 EPS estimate of $0.70.” JAKKS Pacific closed on Tuesday at $11.03.