Q: Is Hasbro stock played out?
A: Hasbro is a big winner from Disney’s run of popular properties. But analysts think the toymaker’s stock is overheating and could be frozen.
It was a solid first quarter for Hasbro, as the company Monday reported 81% higher adjusted profit of 38 cents a share. That topped expectations by 58%, S&P Global Market Intelligence says. Revenue also beat forecasts by jumping 16% to $831 million for the quarter.
The company’s Disney-licensed products are big winners. Hasbro’s girls’ business unit revenue rose 41% to $165.4 million largely due to strong performance of Disney Princess-branded toys and those tied to Disney’s Frozen franchise. The boys’ business unit is still twice the size of girls’ unit but was a slower grower at 24%. The boys’ unit got a boost from Disney’s Star Wars toys.
Analysts see growth continuing, calling for adjusted profit to rise 11% in fiscal 2016, S&P Global says.
Despite all this positive news and the continued strength of Disney-licensed toys, analysts think this stock is played out. Shares of Hasbro have jumped more than 10% over the past 12 months. The stock gained almost 6% Monday on earnings to $87.18. The problem is analysts think the stock is only worth $80.08 in 18 months, S&P Global says.
USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.
