Shares of Hasbro (ticker: HAS) experienced a notable 7.1% rise to $67.71, placing the stock as the top performer in the S&P 500. A BofA Securities analyst suggests that this surge highlights a lack of investor awareness regarding the full potential of Hasbro’s intellectual property.
In a recent note, BofA analyst Jason Haas upgraded the stock to Buy, attributing this decision to the success of Hasbro’s Lord of the Rings Magic set. Additionally, the introduction of digital games such as Monopoly Go and Baldur’s Gate 3 is generating substantial royalty revenue for the company.
According to Haas, these recent accomplishments are just the beginning for Hasbro. He emphasizes the implementation of Hasbro’s Blueprint 2.0 strategy, which focuses on cultivating fewer, but more substantial, brands. As a result, Hasbro has witnessed two successful launches and Haas contends that this strategy will continue to yield positive results.
Taking all these factors into consideration, Haas has maintained his Buy rating on Hasbro, while increasing the price target from $85 to $90, and raising earnings estimates for the coming years.
Notably, Monopoly Go and Baldur’s Gate 3 have performed exceptionally well, potentially driving future earnings growth. Furthermore, BofA analysts see even greater opportunity for Hasbro.
“We believe investors are not fully recognizing Hasbro’s potential to generate high-margin licensing revenue from its extensive IP library, which includes well-known properties like Transformers, Power Rangers, G.I. Joe, My Little Pony, among many others,” Haas stated.
According to FactSet, a majority of analysts hold a bullish outlook on Hasbro, with 85% rating it as a Buy and 15% as Neutral.
Although Hasbro missed expectations for second-quarter adjusted earnings earlier this month, the company still managed to beat revenue projections. Overall, Hasbro’s shares have experienced an 11% gain thus far in 2021.