Funko Stock Jumps After Double Upgrade, Analyst Raises Price Target By 150%

Shares of toy and collectible maker Funko Inc FNKO jumped 8% on Thursday morning after the stock landed a double upgrade on Wall Street.

The Analyst: Bank of America analyst Alexander Perry upgraded Funko from Underperform to Buy and raised his price target from $12 to $30.

Related Link: 'Four Horsemen' Driving The Retail Trading Euphoria: SPACs, Stonks, Cryptos And NFTs

The Thesis: In the upgrade note, Perry said Funko is making tremendous strides in expanding its addressable market with toys, games and NFTs.

Perry estimates the toys and games market represents an $87 billion opportunity for Funko, and the company’s new products can potentially help it capture a larger slice of the pie. In particular, Perry said the expansion of the company’s games category outside of strategy and into kids and family games could help Funko grow its presence in discount retail stores, such as Walmart Inc WMT and Target Corporation TGT.

Funko is also launching a new Gold line of vinyl figurines, which Perry says could expand the company’s target demographic to a younger group of “sneakerhead” consumers and increase the brand’s presence on resale platforms like StockX and GOAT. In addition, he says Funko is generating momentum with its Pop! Brand by launching new products, such as sports, music and anime albums and trading cards.

Funko also plans to launch its NFT business in June by offering a weekly unique digital collectible on the WAX blockchain.

“While we do not expect meaningful revenue contribution this year & believe the market is relatively nascent, we see long-term potential given the significant growth of NFTs,” Perry said.

Benzinga’s Take: It’s difficult to predict the future of the collectibles business, particularly when it comes to brand new genres like NFTs. However, keeping up with the latest trends is critical for toy and collectible makers, and it appears Funko is being aggressive in doing just that.

Related Link: What are the top healthcare stocks to watch right now? Benzinga Global Small Cap Conference streaming LIVE TODAY to find out.

(Photo: Funko)

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorUpgradesPrice TargetSmall CapAnalyst RatingsAlexander PerryBank of AmericaCollectibles
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!