Analyst Martin Landry from Stifel Nicolaus maintained a Hold rating on Spin Master and decreased the price target to C$25.00 from C$33.00.
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Martin Landry has given his Hold rating due to a combination of factors affecting Spin Master’s current and future performance. The company’s recent quarterly results fell short of expectations, with earnings per share significantly below consensus estimates, largely due to increased selling and marketing expenses. Furthermore, the outlook remains grim as retailers are reducing their inventory levels and sourcing more products domestically, which delays revenue recognition for Spin Master.
Additionally, the toy industry is grappling with challenges such as import tariffs on products manufactured in Asia, which are putting pressure on profitability. Spin Master’s valuation compared to its competitor, Mattel, is also a concern, as the valuation spread is narrower than usual. With limited catalysts for growth in the near term and the company’s shares underperforming the market, Landry has opted for a more cautious stance by downgrading the stock to a Hold rating.