Citi has upgraded Hasbro (HAS, Financial) from Neutral to Buy, setting a price target of $72. Analyst James Hardiman highlights the company's exceptional performance in the period following the broader market's recent adjustment, referring to it as the biggest positive surprise. This shift in rating is attributed more to Hasbro's robust business momentum, particularly from its subsidiary, Wizards of the Coast, rather than concerns about tariff exposure.
Wizards of the Coast, a key driver of Hasbro's success, has seen its financial guidance raised by 25% in just two months, indicating strong business growth and potential. The upgrade suggests that the current market conditions present an attractive opportunity for investors to acquire Hasbro shares at a relatively low price, with the company's strong underlying performance providing added confidence in its future prospects.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Hasbro Inc (HAS, Financial) is $73.37 with a high estimate of $86.12 and a low estimate of $55.00. The average target implies an upside of 21.54% from the current price of $60.37. More detailed estimate data can be found on the Hasbro Inc (HAS) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Hasbro Inc's (HAS, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Hasbro Inc (HAS, Financial) in one year is $48.62, suggesting a downside of 19.46% from the current price of $60.37. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Hasbro Inc (HAS) Summary page.
HAS Key Business Developments
Release Date: February 20, 2025
- Revenue: $4.1 billion for the full year, down 7% excluding the E1 divestiture; Q4 revenue was $1.1 billion, down 3% excluding E1.
- Wizards of the Coast and Digital Games Revenue: Up 4% year-over-year; Q4 revenue declined 7% due to one fewer set release.
- Operating Margin: Record operating profit margin over 20% for the company; Wizards segment achieved a 41.8% margin.
- Consumer Products Revenue: Down 12% for the year; Q4 declined 1% due to exited brands and reduced closeout volume.
- Adjusted Operating Profit: $839 million, up 76% year-over-year.
- Net Earnings: Adjusted net earnings of $563 million, up $214 million from the previous year.
- Earnings Per Share (EPS): $4.01 per diluted share for the full year.
- Cash Flow: Operating cash flow of $847 million, an improvement of $122 million.
- Debt Reduction: Reduced debt by $83 million in Q4.
- Cost Savings: Delivered $227 million of net cost savings; on track to achieve $750 million savings goal by 2025.
- Licensing Growth: Licensing business grew by 60% over the last three years.
- Guidance for 2025: Total revenue expected to be up slightly; Wizards revenue forecasted to grow 5% to 7%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hasbro Inc (HAS, Financial) achieved a record operating profit margin of over 20% in 2024, indicating strong financial performance.
- The Wizards of the Coast and Digital Games segment grew by 4% year-over-year, with an impressive operating margin exceeding 40%.
- The company saw significant growth in its licensing business, with a 60% increase over the past three years, making Hasbro the third largest entertainment licensor globally.
- Hasbro's Consumer Products segment returned to profitability, driven by improved marketing effectiveness and retailer alignment.
- The company announced new strategic partnerships, including a collaboration with Mattel for PLAY-DOH Barbie and a video game partnership with Sabre Interactive.
Negative Points
- Hasbro Inc (HAS) reported a 7% decline in total revenue for 2024, excluding the E1 divestiture, indicating challenges in some segments.
- The Consumer Products segment experienced a 12% revenue decline, impacted by exited brands and reduced closeout volume.
- The company anticipates a flat to down 4% revenue outlook for the Consumer Products segment in 2025, with headwinds from NERF and Star Wars.
- Wizards of the Coast's revenue declined by 7% in Q4 2024 due to having one fewer set release, highlighting potential volatility in product release schedules.
- Hasbro faces potential tariff impacts from imports, particularly from China, which could affect cost structures and profitability.
