It’s game on for Hasbro stock, Roth says

It’s been a tough few years for Hasbro shareholders (Hasbro Stock Quote, Chart, News, Analysts, Financials NASDAQ:HAS) but it might just be game on again.

So says Roth MKM analyst Eric Handler, who in a research update to clients February 14 reiterated his “Buy” rating and price target of $60.00 on HAS stock.

On February 13, HAS reported its Q4 and fiscal 2023 results. In the fourth quarter, the company posted EPS of $0.38 on revenue of $1.29-billion, a topline that was down 23 per cent over the same period last year.

“Guided by our strategy of “Fewer, Bigger, Better,” we had important wins across both toys and games while making progress in our transformation during a challenging 2023,” CEO Chris Cocks said. “Despite the macroeconomic backdrop, we are entering 2024 with a healthier balance sheet, a leaner cost structure, and a diverse portfolio of industry-leading toy and game brands that support our capacity to invest in the business and maintain our commitment to returning cash to shareholders via our category-leading dividend. Our refreshed leadership team is bringing innovative new products to our fans. At the same time, we are taking the necessary actions to transform Hasbro and deliver long-term profitable growth starting with driving significant profit growth across our segments in 2024 and building momentum in our innovation pipeline between now and 2025.”

The analyst says the expectation have become lower but the company is now poised for a turnaround.

“Hasbro achieved its goal of entering 2024 with a relatively clean inventory position, it has significantly restructured operations, and has made progress on a multi-year $750mn gross cost savings plan. While it is disappointing the bar for EPS has once again been lowered relative to Street expectations, we believe there are several upside levers which could be seen in the next few years. PT remains $60 (16.5x our 2025E EPS), supported by a ~5.5% dividend yield.”

Handler thinks HAS will post EPS of $3.10 on revenue of $4.10-billion in fiscal 2024. In fiscal 2025, he expects those numbers will be EPS of $3.65 on a topline of $4.34-billion.