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UPDATE: Piper Jaffray Initiates Coverage on LeapFrog With Overweight Rating, $11 PT on Compelling Investment Opportunity

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LeapFrog FQ1 Sales Down 4%; Outlook Far Below Street Views

In a report published Tuesday, Piper Jaffray analyst Stephanie S. Wissink initiated coverage on LeapFrog (NYSE: LF) with an Overweight rating and $11.00 price target.

In the report, Wissink noted, “We are initiating coverage with an Overweight rating. We think shares present a compelling investment opportunity at current levels, owing to an emerging demographic tailwind and an improved brand building approach that stands to drive better operating performance (toward prior peak of 16%) on stable sales. We expect LeapFrog to outgrow the low single digit industry growth average and to improve its customer following with ongoing product innovation. Earnings power nears $1.00, implying a severely discounted multiple for a company with strong brand equity. Execution is the key risk. Our $11 price target is based on 15x FY14E EPS, a modest discount to the group average.”

LeapFrog Enterprises closed on Monday at $9.56.

Posted-In: Piper JaffrayAnalyst Color Initiation Analyst Ratings

 

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