Toy and games retailer Jakks Pacific (JAKK) again receives a Hold recommendation from senior equity analysy Sean P. Smith, even after decent third quarter results.  Here's why:

'We maintain our Hold rating on shares of JAKK following the release of third quarter financial results. Following two consecutive quarters of substantial year-over-year decreases in both gross and operating margins, the company posted improved results in the third quarter. However, we believe that JAKK may continue to face a difficult operating environment going forward.

'Although the shares trade at a discount to the peer group average, given the relatively anemic EPS growth forecast, we believe that a discounted valuation is appropriate for shares of JAKK. As such, we continue our Hold rating on the shares.

'Our $28 six-month target price for JAKKS Pacific is based on a P/E multiple of 11x our 2008 earnings estimate. Hasbro (HAS) and Mattel (MAT) currently trade at P/E multiples of approximately 15x fiscal year 2008 EPS estimates, while RC2 Corporation (RCRC) currently trades at a P/E multiple of 16.3x our 2008 EPS estimate.'