On Friday, B.Riley reaffirmed its Buy rating and $41.00 price target on JAKKS Pacific (NASDAQ:JAKK). The firm believes that the company's shares, currently trading at approximately a 37% discount compared to its peers, will experience a positive valuation adjustment in 2025.
This anticipated change is based on the visibility of the company's growth prospects and the expectation of the board's move to allocate excess capital to shareholders, likely through a regular dividend.
The analyst from B.Riley highlighted the underperformance of JAKKS Pacific's stock relative to its peer group. Despite this, the firm's outlook remains optimistic regarding the company's future valuation. The analyst's commentary pointed to the growth potential of JAKKS Pacific becoming more apparent to investors in the coming years.
The expected move by JAKKS Pacific's board to allocate excess capital to shareholders was specifically mentioned as a probable catalyst for the stock's re-rating. The analyst anticipates that this will most likely take the form of a regular dividend, which could attract investor interest and positively influence the stock's performance.
The reiterated Buy rating and price target of $41.00 reflect B.Riley's confidence in JAKKS Pacific's potential to close the valuation gap with its competitors. The firm's stance suggests that they see a significant upside to the current trading price, provided the company follows through on its growth trajectory and capital allocation strategies.
B.Riley's analysis and expectations for JAKKS Pacific are based on the current market conditions and the company's strategic plans. The firm's reiteration of the Buy rating and price target is an indication of their belief in the company's value proposition and potential for future growth.
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