Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity research on small cap consumer names.

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

Equity Bottom-Up

<ul><li>We are reiterating our Buy rating, but lowering our projections for 2025 and 2026 and reducing our JAKK price target to $30 (from $40), or 9.8X our new 2026 EPS, after meeting with JAKKS Pacific management.</li><li>While we remain positive on the rising international segment, the ability of management to leverage their leading market position and the potential for new licenses/acquisitions (particularly in 2026), the near-term reverberations from the China tariffs in 1H25 have already begun to show in the lead up to Halloween and Xmas.</li><li>Further, we believe JAKKS management is, rightfully, remaining cautious in terms of inventory risk, which, combined with the company's focus on the Freight On Board ("FOB") shipping model, will limit potential upside if the Xmas season is later (and stronger) than usual.</li></ul>

We are reiterating our Buy rating, but lowering our projections for 2025 and 2026 and reducing our JAKK price target to $30 (from $40), or 9.8X our new 2026 EPS, after meeting with JAKKS Pacific management.While we remain positive on the rising international segment, the ability of management to leverage their leading market position and the potential for new licenses/acquisitions (particularly in 2026), the near-term reverberations from the China tariffs in 1H25 have already begun to show in the lead up to Halloween and Xmas.Further, we believe JAKKS management is, rightfully, remaining cautious in terms of inventory risk, which, combined with the company's focus on the Freight On Board ("FOB") shipping model, will limit potential upside if the Xmas season is later (and stronger) than usual.

JAKK: Mgmt. Meetings; Living in a Low Risk World; Lowering PT, Reiterate Buy