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Hasbro Faces Decline Ahead of Anticipated Earnings Report

Hasbro's stock saw a slight decrease of 0.52% as it closed at $72.11, trailing behind the broader market gains. Investors are closely watching the upcoming earnings report, with EPS expected to drop significantly, indicating potential challenges ahead.

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AI Rating:   5

Hasbro (HAS) has recently experienced a minor decline of 0.52% in its stock price, closing at $72.11. This performance lags behind the gains seen in broader market indices, including the S&P 500, Dow, and Nasdaq. Over the past month, Hasbro shares have shown a notable increase of 7.19%, outperforming the Consumer Discretionary sector and the S&P 500, which gained 6.03% and 5.41%, respectively.

Looking forward, the upcoming earnings release scheduled for October 24, 2024, is of particular concern to investors. The projected earnings per share (EPS) is expected to be $1.36, down 17.07% from the same quarter last year, indicating a worsening performance. Furthermore, the revenue estimate stands at $1.3 billion, representing a significant 13.2% decline compared to the same quarter of the prior year. Such decreases could negatively impact the stock price as investor sentiment may shift due to these disappointing projections.

For the entire year, the Zacks Consensus Estimates suggest a forecast of $3.93 per share in earnings and a revenue projection of $4.17 billion. This represents a drastic contrast with earnings expected to rise by 56.57%, while revenue may decrease by 16.62% year-over-year. The disparity between earnings growth and revenue decline may raise questions about the company's profitability and revenue-generating ability, potentially leading to a lack of investor confidence.

Additionally, Hasbro's Zacks Rank of #2 (Buy) and recent 0.19% increase in EPS estimates over the last 30 days could imply that some analysts maintain confidence in the stock's potential. However, the overall sentiment could be dampened by the expected declines in EPS and revenue.

Investors may also consider Hasbro's Forward P/E ratio, currently at 18.43, which is higher than the industry average of 15.96, indicating a premium valuation. The PEG ratio at 0.54 suggests that the stock price may be undervalued based on its expected growth rate, but this can be overshadowed by the downward pressure from declining revenues.

The Zacks Industry Rank of 47 places the Toys - Games - Hobbies industry in the top 19% of all industries, further emphasizing the competitive landscape that Hasbro operates in.

Stocks:  HAS