Deutsche Bank Says Sell LeapFrog

Analyst Jeetil Patel says the educational product company's revised its guidance due to weak Holiday toy retailing environment

Deutsche Bank reiterates sell on LeapFrog Enterprises (LF ).

Analyst Jeetil Patel says LeapFrog withdrew its previous 40 cents to 60 cents 2004 guidance on $680 million to $710 million in revenues, citing a weak Holiday toy retailing environment in the U.S.

Although he is already well below consensus, Patel cuts his 31 cents fourth-quarter earnings per share estimate to 23 cents and $315 million revenue to $293 million. He also cuts his 33 cents 2004 earnings per share estimate to 24 cents, and $699 million revenue to $677 million.

He maintains 2005 estimates although he believes the estimates are clearly at risk. He reiterates his sell rating and $8 target.