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Rhode Island-based Hasbro, Inc. (HAS) operates as a toy and game company. Valued at a market cap of $7.9 billion, the company offers traditional, high-tech, and digital toys, games, and licensed products under various well-known brands, including Magic: the gathering, Nerf, My little pony, Transformers, Play-doh, Monopoly, Baby alive, Dungeons & Dragons, Power Rangers, Peppa pig and PJ Masks.
Companies valued at less than $10 billion are typically classified as “mid-cap stocks,” and Hasbro fits the label perfectly. It delivers immersive brand experiences for global audiences through consumer products, including toys and games; entertainment through eOne, its independent studio; and gaming, led by the team at Wizards of the Coast. The toy company is best known for its fantasy franchises Magic: The Gathering and Dungeons & Dragons.
Despite its strengths, the company has slipped 22.8% from its 52-week high of $73.46, achieved on Oct. 1. Moreover, it has declined 21.4% over the past three months, significantly falling behind the broader Consumer Discretionary Select Sector SPDR Fund’s (XLY) 14.4% increase over the same time frame.
Moreover, in the longer term, HAS has gained 11.2% over the past 52 weeks, underperforming XLY’s 27% returns. Over the past six months, shares of HAS are down 2.5%, massively lagging behind XLY’s nearly 24.6% gains over the same time frame.
To confirm its bearish price trend, Hasbro has been trading below its 200-day moving average since mid-December and has remained below its 50-day moving average since late October.
On Oct. 24, shares of Hasbro dropped 6% after reporting a weaker-than-expected Q3 revenue figure of $1.28 billion, which fell 14.8% from the year-ago quarter. Its disappointing top-line figure was a result of a decline in revenues across all of its reportable operating segments. However, its adjusted EPS increased 5.5% year-over-year to $1.73 and significantly surpassed the consensus estimate of $1.31 per share.
Hasbro has outperformed its rival, Mattel, Inc.’s (MAT) 5.4% decline over the past 52 weeks but has lagged behind MAT’s 10.1% rise over the past six months.
Despite Hasbro’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 11 analysts covering it, and the mean price target of $79.73 suggests a massive 40.6% premium to its current levels.
