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Pawtucket, Rhode Island-based Hasbro, Inc. (HAS) designs, manufactures, and markets games and toys. Valued at a market cap of $8.6 billion, the company offers traditional, high-tech, and digital toys, games, and licensed products under various well-known brands and is renowned for its fantasy franchises like Magic: The Gathering and Dungeons & Dragons.
Shares of this toy company have outperformed the broader market over the past 52 weeks. HAS has rallied 38.5% over this time frame, while the broader S&P 500 Index ($SPX) has gained 30.1%. However, on a YTD basis, the stock is up 21.1%, lagging behind SPX’s nearly 24.1% increase.
Zooming in further, HAS has outpaced the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 28.6% gains over the past 52 weeks and 20.5% returns on a YTD basis.
On Oct. 24, shares of HAS fell 6% after its mixed Q3 earnings release. The company’s revenue declined 14.8% year-over-year to $1.28 billion, missing the consensus estimates of $1.3 billion. This was primarily driven by the softer consumer product segment volume and expected declines in licensed and digital gaming due to the launch of Baldur's Gate 3 and eOne divestiture, which impacted the company’s entertainment segment. However, its adjusted EPS of $1.73 increased 5.5% year-over-year, surpassing the consensus estimate of $1.31 per share.
For the current fiscal year, ending in December, analysts expect HAS’s EPS to grow by a staggering 56.5% year over year to $3.93. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 11 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on seven “Strong Buy,” one “Moderate Buy,” and three “Hold” ratings.
On Oct. 25, Morgan Stanley maintained an “Overweight” rating on HAS and raised its price target to $92, which indicates a 49.3% upside from the current levels.
The mean price target of $79.73 represents a 29.4% upside from HAS’ current price levels. The Street-high price target of $95 suggests an upside potential of 54.2%.
