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Hasbro Inc HAS

Morningstar Rating
$63.93 −1.08 (1.66%)
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Company Report

Hasbro Earnings: Profitability Improves Materially After EOne Divestiture; Shares Remain Attractive

Now liberated from the eOne entertainment business, narrow-moat Hasbro’s profitability swung significantly higher. In the first quarter, Hasbro delivered adjusted operating margin of 19.6%, more than 1,500 basis points higher than last year, which was saddled with excess inventory markdowns. Cost savings from the firm’s $750 million reduction plan are coming faster than we anticipated, with savings from operating expenses contributing to more than half the improvement. Sales of $757 million were in line with our forecast, although Wizards of the Coast and digital (WOTC) sales were a touch better than we expected, up 7%, while consumer products were a bit weaker, down 21%, suffering from lower consumer demand and the out license of lower profitability brands. Working capital is much healthier, with inventory flat sequentially but down 53% year over year, as Hasbro cleans house in consumer products. We have long held that a refocus on core competencies would provide a positive step change in profitability, which is finally coming to fruition.

Price vs Fair Value

HAS is trading at a 33% discount.
Price
$55.90
Fair Value
$65.00
Uncertainty
Medium
1-Star Price
$357.20
5-Star Price
$65.90
Economic Moat
Dymymb
Capital Allocation
Gmlbywqm

Bulls Say, Bears Say

Bulls

Opportunities exist from entertainment, bolstered by the Discovery Family network, owned production capabilities, and film tie-ins, supporting product demand.

Bears

The market for traditional toys could continue to shrink as a percentage of the total as technology plays a more dominant role in product selection and children shift to more digital toys at a younger age.

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News

Trading Information

Previous Close Price
$65.01
Day Range
$63.2264.90
52-Week Range
$42.6773.58
Bid/Ask
$63.89 / $64.01
Market Cap
$8.85 Bil
Volume/Avg
173,480 / 1.8 Mil

Key Statistics

Price/Earnings (Normalized)
25.81
Price/Sales
1.81
Dividend Yield (Trailing)
4.31%
Dividend Yield (Forward)
4.31%
Total Yield
4.31%

Company Profile

Hasbro is a branded play company providing children and families around the world with entertainment offerings based on a world-class brand portfolio. From toys and games to television programming, motion pictures, and a licensing program, Hasbro reaches customers by leveraging its well-known brands such as Transformers, Nerf, and Magic: The Gathering. Ownership stakes in Discovery Family, which offers programming around Hasbro brands, and production capabilities has helped bolster Hasbro's multichannel presence. The firm acquired EOne in 2019, bolting on popular family properties like Peppa Pig and PJ Masks, and since has pruned noncore lines from the tie-up. Furthermore, the addition of Dungeons & Dragons Beyond in 2022, offered the firm access to 10 million digital tabletop players.
Sector
Consumer Cyclical
Industry
Leisure
Stock Style Box
Small Value
Total Number of Employees
5,502

Competitors

Valuation

Metric
HAS
TOY
MAT
Price/Earnings (Normalized)
25.8111.2215.59
Price/Book Value
8.501.723.26
Price/Sales
1.811.291.25
Price/Cash Flow
17.247.336.13
Price/Earnings
HAS
TOY
MAT

Financial Strength

Metric
HAS
TOY
MAT
Quick Ratio
0.772.641.75
Current Ratio
1.132.952.33
Interest Coverage
−8.3035.084.56
Quick Ratio
HAS
TOY
MAT

Profitability

Metric
HAS
TOY
MAT
Return on Assets (Normalized)
4.18%12.27%4.57%
Return on Equity (Normalized)
15.48%17.27%13.80%
Return on Invested Capital (Normalized)
8.04%15.24%7.71%
Return on Assets
HAS
TOY
MAT
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