Hasbro’s Performance: Mixed Results Reflect Market Dynamics
Strong Yearly Gains but a Recent Slide
Pawtucket, Rhode Island’s Hasbro, Inc. (HAS) is a major player in the design, manufacturing, and marketing of toys and games. Currently, the company boasts a market cap of $8.6 billion. It is well-known for its diverse offerings, including traditional and digital toys, games, and popular franchises like Magic: The Gathering and Dungeons & Dragons.
Comparative Market Performance
Over the past 52 weeks, Hasbro’s stock has outperformed the broader market. The company’s shares have rallied 38.5%, outpacing the S&P 500 Index ($SPX), which has risen 30.1%. However, on a year-to-date basis, Hasbro’s stock has increased by 21.1%, falling short of the S&P’s nearly 24.1% rise.
Against Consumer Sector Benchmarks
Evaluating further, HAS has outperformed the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 28.6% gains in the last year, as well as its 20.5% returns year-to-date.
Recent Earnings Report Causes Concerns
On October 24, Hasbro’s shares took a hit, falling 6% following a mixed earnings report for Q3. The company reported a revenue drop of 14.8% year-over-year, totaling $1.28 billion, which fell short of consensus estimates of $1.3 billion. This decline was largely due to weaker consumer product sales and anticipated declines in licensed and digital gaming, attributed to the launch of Baldur’s Gate 3 and the divestiture of eOne. Conversely, adjusted earnings per share (EPS) was reported at $1.73, reflecting a year-over-year increase of 5.5%, exceeding estimates of $1.31 per share.
Future Earnings Outlook
For the current fiscal year, which ends in December, analysts anticipate an impressive 56.5% growth in Hasbro’s EPS, projecting earnings of $3.93. The company’s history of earnings surprises is varied; it has exceeded estimates in three of the last four quarters while missing in one instance.
Analyst Ratings and Price Targets
Among the 11 analysts monitoring HAS, the consensus rating stands at “Moderate Buy,” with seven “Strong Buy,” one “Moderate Buy,” and three “Hold” ratings.
Brokerage Opinions and Growth Potential
On October 25, Morgan Stanley maintained an “Overweight” rating on Hasbro, adjusting its price target to $92. This adjustment indicates a potential upside of 49.3% from current levels. Additionally, the average price target stands at $79.73, suggesting a 29.4% upside, while the highest target of $95 implies a potential increase of 54.2%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
