Jakks Pacific shares fall after BMO downgrade

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SAN FRANCISCO (AP) — Shares of Jakks Pacific Inc. fell Monday after a BMO Capital Markets analyst downgraded the stock due to weak sales and excess inventory.

BMO Capital Markets Gerrick Johnson downgraded Jakks to “Market Perform” from “Outperform” and lowered BMO’s 12-month price target to $14 from $18. Jakks makes toys, wrestling action figures and Pokemon brand items.

Jakks shares lost 81 cents, or 6.5 percent, at $11.73 in midday trading.

“Despite strong overall trends in the toy industry this holiday season, we think Jakk’s near-term results will be pressured by weak sell-through and an overabundance of clearance items at retail,” Johnson told investors in a Monday research report.

Johnson lowered the firm’s profit predictions. For the fourth quarter, it now expects 13 cents per share, down from an earlier prediction of 21 cents that matched the consensus estimate of analysts polled by Thomson Reuters.

BMO also lowered its 2009 profit estimate to 95 cents per share from $1.03; its 2010 profit estimate to $1.25 per share from $1.50; and its 2011 profit outlook to $1.40 per share from $1.60.

Analysts expect profit of 99 cents per share for 2009 and $1.35 per share in 2010.