“Magic: The Gathering”, is powering Hasbro’s stock, analyst says

In an April 7 report, Roth Capital Markets analyst Eric Handler maintained his “Buy” rating and $120.00 target on Hasbro (Hasbro Stock Quote, Chart, News, Analysts, Financials NASDAQ:HAS), saying the company continues to execute well and appears set up for another year of mid-single-digit growth in revenue and operating income.

“We remain positive towards Hasbro and have been impressed by its ability to consistently outperform expectations over the last two years,” Handler said, adding that first-quarter upside is likely to come from Magic: The Gathering.

Handler left his first-quarter estimates unchanged, calling for revenue of $903-million, up two per cent, operating income of $219-million, down one per cent, and EPS of $0.98, versus consensus of $911-million, $221-million and $0.99. He said Wizards of the Coast should remain the main growth driver, with projected revenue of $504-million, up 9%, and operating income of $239-million, up 4%.

The analyst said his Magic forecast could prove conservative, citing stronger-than-expected demand for the Lorwyn Eclipsed and Teenage Mutant Ninja Turtles card releases, as well as ongoing strength from older sets and Secret Lair. He expects Magic revenue growth of 12%, though higher royalties tied to the Ninja Turtles set are likely to weigh on margins.

For Consumer Products, Handler expects revenue of $372-million, down 6.5%, and an operating loss of $34-million, compared with a $31-million loss a year earlier. He said the segment is facing a tough comparison from a one-time My Little Pony licensing payment, though earlier Easter timing and potential early shipments tied to The Mandalorian & Grogu could provide some upside. He added that first quarter should be the only down quarter for the segment this year, with entertainment-driven demand expected to improve through the balance of 2026.

Looking ahead, Handler said the second quarter should be Hasbro’s strongest for top-line growth, with projected revenue of $1.09-billion, up 11.5%, operating income of $275-million, up 11%, and EPS of $1.30, flat year over year. He expects growth of 9% at Wizards of the Coast and 14% at Consumer Products, helped by the Marvel Super Heroes Magic release and the theatrical debut of The Mandalorian & Grogu.

Handler also said debt reduction and share repurchases remain important parts of the story. With the stock down 15% from its February high and Hasbro holding $882-million in cash at year-end, he said investors will be watching to see whether management begins using its new $1-billion buyback authorization. He expects the company to generate more than $650-million in free cash flow in 2026, with most of that coming in the second half.

Handler said that Hasbro should do $1,421-million in Adjusted EBITDA on revenue of $4,897-million in fiscal 2026.

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