UPDATE: BMO Capital Markets Upgrades LeapFrog Enterprises to Outperform, Reiterates $10 PT as Toad-Like Sentiment Presents Interesting Opportunity

In a report published Tuesday, BMO Capital Markets analyst Gerrick L. Johnson upgraded the rating on LeapFrog Enterprises LF from Market Perform to Outperform, and reiterated the $10.00 price target. In the report, BMO Capital Markets noted, “Last week LF announced that, owing to weakness at retail, 4Q sales and earnings would be below prior forecasts. LF shares reacted negatively to the news. But with recent share price declines exceeding 30%, several new ratings downgrades, and a huge short position (32% of float), we think this bad news is more than fully discounted by the current share price. We think that LF stock, under $8 per share, presents a compelling risk/reward opportunity to investors. In the near term, we think any surprise for investors is now more likely to be to the upside than to the downside. But, also, over the longer term, we think there is still a lot to like about LF, including a well-known and respected brand name, an attractive position as the leader in educational toys, and opportunities to expand and grow its educational entertainment content business.” LeapFrog Enterprises closed on Monday at $7.95.