Hasbro Earnings: Profits Set for Improvement as Firm Continues to Prune Underperforming Lines

Weaker-than-expected fourth-quarter sales and profits along with frustration around the duration of narrow-moat Hasbro’s turnaround sent shares down at a mid-single-digit clip on Feb. 13. But we view the reaction to Hasbro’s initial 2024 outlook—that calls for a fourth year of top-line declines—as relatively subdued, thanks to turnaround efforts that are set to benefit the intrinsic value of the firm over the longer term. We plan to lower our $88 fair value estimate by a mid-single-digit rate to account for near-term headwinds but still view shares as attractive given near-term profit gain visibility.