UPDATE: Imperial Capital Downgrades LeapFrog Enterprises to In-Line, Lowers PT on Sluggish Trends, Challenging Season Ahead

In a report published Wednesday, Imperial Capital analyst Lee J. Giordano downgraded the rating on LeapFrog Enterprises LF from Outperform to In-Line, and lowered the price target from $13.00 to $9.00. In the report, Imperial Capital noted, “We are downgrading our rating on LeapFrog from Outperform to In-Line and reducing our price target to $9 from $13, about 13% above the recent share price. Our In-Line rating and lower price target reflects sluggish point-of-sale trends amid an increasingly challenging consumer spending environment and expectations for a highly promotional and competitive holiday season within the kids tablet segment. While we believe upside to the stock could be limited in the near term given increased uncertainty heading into 2014, we do not see significant downside risk from current levels and remain positive on the longer-term outlook for LeapFrog given its strong balance sheet, differentiated product offering, expanding content library, international growth opportunity, and leadership position within the educational entertainment niche.” LeapFrog Enterprises closed on Tuesday at $7.98.