April 9, 2019 / 12:59 PM / 7 months ago

BUZZ-Spin Master: D.A.Davidson bullish on Bakugan and Monster Jam toys

** D.A.Davidson initiates coverage on Canadian toymaker Spin Master with a “buy” rating; sees attractive valuation and growth opportunities this year and next

** Analyst Linda Weiser says growth drivers in 2019 include Bakugan and Monster Jam toys; Abby Hatcher and DC Comics in 2020

** Weiser, whose price target of C$51 matches Street’s median, says TOY shares currently trading at 15.6x 2020 EPS estimate (vs 18x for Hasbro) makes them attractive for a company targeting mid- to high-single-digit organic sales growth

** Co’s debt-free balance sheet and strong free cash flow should enable it to aggressively pursue acquisition opportunities, which could become more numerous in the aftermath of Toys ‘R’ Us liquidation - Weiser

** 8 of 11 brokerages rate the stock “buy” or higher and 3 “hold”

** TOY down 38% from its record high hit in March 2018 which Weiser attributes to falling Hatchimals toy sales

** Stock largely flat this year; HAS up 6.5%, Mattel up ~35% and JAKKS Pacific down 25%

Reporting by Uday Sampath in Bengaluru

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