On Thursday, BofA Securities updated its stance on Hasbro (NASDAQ:HAS) shares, a leading toy and board game company. The firm raised the price target on Hasbro shares to $60 from the previous $51, while maintaining a Neutral rating. The adjustment comes ahead of Hasbro's first-quarter earnings report, which is scheduled for April 24th.
The BofA Securities analyst cited a reduction in the first-quarter earnings per share (EPS) estimate to $0.24 from $0.45, attributing this to a lowered forecast for Consumer Products (CP) revenue. The analyst pointed to ongoing challenges faced by the company before the launch of new innovations in the second half of the year and a comparison with last year's higher closeout volumes in the discount channel.
For the full year, the analyst is modeling a 9% year-over-year decline in CP revenue. This includes a 4 percentage point impact from planned exits and reflects a downturn in the overall industry's point of sale. Hasbro anticipates that sell-in will better align with sell-through, given that retail inventories are currently at more balanced levels.
Despite a projected downturn in CP segment revenue, a return to slight growth is expected in the fourth quarter. This optimism is based on the anticipated benefits from new product launches, such as NERF and BeybladeX. However, a less favorable retail calendar is also noted, with five fewer shopping days between Thanksgiving and Christmas compared to previous years.
InvestingPro Insights
As Hasbro approaches its first-quarter earnings report, insights from InvestingPro paint a nuanced picture of the company's performance and expectations. With a market capitalization of $7.69 billion, Hasbro's recent trading activity indicates a strong return over the last three months, with a 16.63% price total return, reflecting investor optimism. This is in line with BofA Securities' increased price target, suggesting that the market may also be anticipating a positive shift.
InvestingPro Tips reveal that analysts have revised their earnings upwards for the upcoming period, signaling confidence in Hasbro's potential despite a challenging environment. Additionally, while the company has not been profitable over the last twelve months, analysts predict it will return to profitability this year, which could be a key driver for future stock performance. Notably, Hasbro has maintained dividend payments for 44 consecutive years, offering a current dividend yield of 5.11%, a testament to its commitment to shareholder returns.
Investors looking for a deeper dive into Hasbro's financials and additional analyst insights can find more InvestingPro Tips at https://www.investing.com/pro/HAS. There are 6 additional tips available, offering a comprehensive view of the company's prospects. For those interested in an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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