Consumer discretionary stocks are mostly now recovering from their COVID-19 pandemic-induced mid-2020 lows, but some headwinds still persist. Despite a challenging shipping hurdle which had manifested out of an overstretched ecommerce demand, Hasbro, Inc. (HAS) was still able to report on a “pivotal quarter.” (See Hasbro stock charts on TipRanks)
Detailing the development is Stephanie Wissink of the Jefferies Group, who wrote that the multinational toy manufacturer beat Wall Street consensus estimates for its sales and EBITDA, and the lack of a shift in guidance shows management’s confidence in its current business direction.
Wissink reiterated a Buy rating on the stock and assigned a price target of $120. This target is up from her previous at $115, showing her equally-adjusted bullishness on the company.
The four-star analyst explained that sales of the subsidiary game developer, Wizards of the Coast, were up about 118% quarter-over-quarter, and that entertainment revenue is up 47%. Furthermore, following the 2019 acquisition of eOne, the purchased company now has a positive outlook in regards to its pipeline for the back half of FY21.
Additionally, Wissink added that the second half of FY21 will include new innovations in several toy lines and campaigns. Despite the fact that shipping costs have weighed on the physical toy sector, Hasbro is now expected to “move pricing higher in lock step with the broader toy industry.”
Positively, COVID-19 provided increased household penetration in digital gaming, and Hasbro is experiencing significant expansion and retention in this realm.
On TipRanks, HAS has an analyst rating consensus of Moderate Buy, based on 5 Buy and 3 Hold ratings. The average Hasbro price target is $112.13, reflecting a potential 12-month upside of 10.47%, as of intraday trading at 10:08 a.m. EST Wednesday.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
