RC2 rises as analyst initiates with 'Outperform'

RC2 Corp. is well positioned to capitalize on the market for early childhood and motherhood products, an analyst said Monday, and initiated coverage on the toy maker with an "Outperform" rating.

Shares rose 65 cents, or 6.9 percent, to $10.08 during midday trading. The stock has traded between $3.22 and $27.09 during the past 52 weeks.

Robert W. Baird & Co. analyst Craig R. Kennison wrote in a note to investors on Monday that he likes the company's "durable license agreements, promising new product lines and focus on the prenatal-to-preschool market."

In particular, the company's PBS series Super Why license and train-themed Chuggington property, which will come out in 2009 and 2010, respectively, are pluses, he said.

Oak Brook, Ill.-based RC2 could also benefit from improving toy retail trends, he said.

"Retailers may be approaching the end of an inventory liquidation cycle," he wrote. "Order patterns have improved in March and April, but sell-through has been ahead of sell-in for some time."

He initiated coverage on the company with an "Outperform" rating and $12 target price.