Morningstar

Hasbro Continues to Take Incremental Share in 2017

We don't plan any material change to our $91 fair value estimate for the narrow-moat toymaker.

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Hasbro Inc
(HAS)

Despite slowing toy category sales in the first quarter, hindered by a later Easter, narrow-moat

Our long-term prognosis for Hasbro is intact, incorporating low-single-digit top-line sales growth domestically and high-single-digit sales growth internationally, which should help the company take modest share of the toy category. Our more recent concern has been the ability to capture robust growth on the heels of Star Wars: The Force Awakens success, which has led the 2017 earnings multiple to expand to more than 20 times, while earnings per share rise at a single-digit pace. Longer term we forecast EPS growth at a high-single-digit pace as operating leverage and share buybacks help improve SD&A expenses, leading to operating margins around 18% from 16.4% in 2016.

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About the Author

Jaime M. Katz, CFA

Senior Equity Analyst
More from Author

Jaime M. Katz, CFA, is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She covers home improvement retailers and travel and leisure.

Before joining Morningstar in 2011, Katz was an associate for Credit Agricole Corporate and Investment Bank. She also worked in equity research for William Blair for three years and spent three years in asset management at Mesirow Financial.

Katz holds a bachelor’s degree in economics from the University of Wisconsin and a master’s degree in business administration from the University of Chicago Booth School of Business. She also holds the Chartered Financial Analyst® designation. She ranked first in the leisure goods and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

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