Analyst Linda Bolton Weiser of D.A. Davidson maintained a Hold rating on Hasbro (HAS – Research Report), boosting the price target to $59.00.
Linda Bolton Weiser’s rating is based on a careful examination of Hasbro’s first-quarter financial performance and the broader operational context of the company. Although Hasbro exceeded expectations with a first-quarter earnings beat, the underlying segment profit, excluding an unexpected corporate profit of $45 million, was only marginally above the consensus. Additionally, the toy operating margin saw a decline despite significant closeouts in the previous year. While Hasbro hinted at potentially raising guidance after the second quarter, the absence of free cash flow (FCF) guidance and the uncertainty regarding the magnitude by which 2024 FCF will exceed dividends contribute to the Hold rating.
The Hold rating also considers the overall sales performance and operating margins across Hasbro’s various segments. Sales were largely in line with expectations, despite a switch to a licensing model for certain brands and a decrease in closeout sales. Wizards & Digital Gaming showed positive growth, outperforming expectations. The operational margins improved year-over-year, but this was influenced by a non-recurring corporate profit item. While robust cost savings are projected for 2024, and Hasbro is on track to meet its gross savings target by the end of 2025, the current financial and operational metrics suggest a cautious stance, justifying the Hold rating.
According to TipRanks, Bolton Weiser is a 3-star analyst with an average return of 2.3% and a 45.84% success rate. Bolton Weiser covers the Consumer Cyclical sector, focusing on stocks such as The Estée Lauder Companies, e.l.f. Beauty, and WW International.
In another report released on April 25, Goldman Sachs also maintained a Hold rating on the stock with a $62.00 price target.
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Hasbro (HAS) Company Description:
Hasbro, Inc. engages in the provision of children and family leisure time products and services with a portfolio of brands and entertainment properties. The firm operates under the following brands: Littlest Pet Shop, Magic: The Gathering, Monopoly, My Little Pony, Nerf, Play-Doh, and Transformers. It operates through the following segments: United States and Canada, International, and Entertainment, Licensing and Digital. The United States and Canada segment refers to the marketing and sale of products in the United States and Canada which include the innovation and reinvention of toys and games. The International segment engages in the marketing and sale of product categories to retailers and wholesalers in Europe, Latin and South America, and the Asia Pacific region and through distributors in those countries where there is no direct presence. The Entertainment, Licensing and Digital segment conducts movie, television and digital gaming entertainment operations. The company was founded by Henry Hassenfeld and Hilal Hassenfeld in 1923 and is headquartered in Pawtucket, RI.
