Hasbro cut to Underperform at BofA on Magic: The Gathering concerns

BofA analyst Jason Haas downgraded Hasbro to Underperform from Buy with a price target of $42, down from $73. According to his conversations with several players, collectors, distributors and local games stores, the company has been overproducing its Magic: The Gathering game cards and destroying the long-term value of the brand, the analyst tells investors in a research note. The increased supply has crashed secondary market prices which has caused distributors, collectors and local game stores to lose money on Magic, and as a result, they’ll order less product in future releases, Haas adds, also noting that the franchise accounts for about 15% of Hasbro’s revenue and 35% of its EBITDA.