Hasbro's Outlook Dim as EPS Expected to Drop 20.73%

In a recent report, Hasbro's stock is drawing investor attention due to anticipated declines in EPS and revenue. The forthcoming earnings report will be crucial in determining investor sentiment and future stock movements.

Date: 03-10-2024

AI Rating: 5

Hasbro (HAS) recently closed at $72.36, reflecting a change of -0.73% from the previous trading day, lagging the S&P 500's slight gain of 0.01%. Despite this daily setback, Hasbro's shares have appreciated by 8.37% over the past month, significantly outperforming both the Consumer Discretionary sector (3.93%) and the S&P 500 (1.21%).

Investors are anticipated to closely monitor Hasbro's upcoming earnings report. The report is projected to show an EPS of $1.30, a substantial decline of 20.73% from the same quarter last year. Furthermore, revenue is forecasted at $1.31 billion, indicating a year-over-year drop of 13.03%. These projections raise concerns regarding the company's immediate financial health.

On an annual basis, Zacks Consensus Estimates suggest earnings will be $3.93 per share, reflecting an increase of 56.57%, but revenue is expected to decrease by 16.62% to $4.17 billion. This contrast between earnings and revenue may signal operational challenges, particularly with the projected decline in revenue.

Additionally, analysts keep a keen eye on recent revisions to their forecasts for Hasbro. Changes in estimates are often precursors to how the stock will perform in the near term, as they reflect analysts' perceptions of the company’s profitability and business conditions. Currently, the Zacks Consensus EPS estimate has seen a slight increase of 0.19% over the past month.

Valuation metrics reveal that Hasbro has a Forward P/E ratio of 18.53, which is higher than the industry average of 15.93. This valuation may deter some investors unless accompanied by strong future earnings growth. The company's PEG ratio stands at 0.54, contrasting sharply with the industry average of 1.24, suggesting that Hasbro may be undervalued in terms of its expected earnings growth trajectory.

The Toys - Games - Hobbies industry, to which Hasbro belongs, is currently positioned in the top 41% of over 250 industry groups according to the Zacks Industry Rank. This relatively strong positioning coupled with the predicted EPS drop may create mixed sentiments among investors.

Stocks: HAS