Investors don’t fully appreciate the opportunity Hasbro’s intellectual property offers, according to a BofA Securities analyst, who lifted his price target on the toy maker.
Shares of
Hasbro
(ticker: HAS) rose 7.1% to $67.71, and the stock was the leading performer in the
S&P 500.
BofA analyst Jason Haas wrote in a Tuesday note that they recently upgraded the stock to Buy on the strength of Hasbro’s Lord of the Rings Magic set. There are also recently introduced digital games, Monopoly Go and Baldur’s Gate 3, from which the company snaps up royalty revenue.
“Hasbro has now seen two more successful releases, early wins for Hasbro’s Blueprint 2.0 strategy which focuses on fewer, bigger brands,” the analyst said.
With that in mind, Haas maintained his Buy rating on Hasbro, increased his price target to $90 from $85, and raised earnings estimates for the next few years.
Monopoly Go and Baldur’s Gate 3 “are performing exceptionally well,” Haas continued, which could boost earnings going forward. And now BofA analysts see even more opportunity.
“We believe investors don’t fully appreciate Hasbro’s potential to generate high-margin licensing revenue from its strong IP library which includes Transformers, Power Rangers, G.I. Joe, My Little Pony, and many more,” Haas added.
A majority of analysts are bullish on the stock, with 85% rating it Buy and 15% at Neutral, according to FactSet.
Earlier this month, Hasbro missed second-quarter adjusted earnings expectations but beat on revenue. Shares have gained 11% this year.
Write to Emily Dattilo at [email protected]
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