The Untapped Potential of Hasbro’s Intellectual Property
Investors are underestimating the vast potential of Hasbro’s intellectual property, says BofA Securities, as the company introduces successful digital games and generates royalty revenue. Hasbro's stock has risen 7.3%.
Troy D. Hanson
August 23, 2023
Investors seem to be underestimating the vast potential that lies within Hasbro’s intellectual property, according to a recent analysis by BofA Securities. As a result, the firm has raised its price target for the toy maker.
The stock of Hasbro (ticker: HAS) has risen by 7.3% to reach $67.84, making it the top performer in the S&P 500.
BofA analyst Jason Haas emphasized in a note published on Tuesday that they have upgraded the stock to Buy based on the success of Hasbro’s Lord of the Rings Magic set. Additionally, the company has recently introduced two digital games, Monopoly Go and Baldur’s Gate 3, which are generating significant royalty revenue.
"The release of Monopoly Go and Baldur’s Gate 3 have been major triumphs," Haas stated. This success could potentially lead to increased earnings for Hasbro. Furthermore, BofA analysts believe there is even more untapped opportunity.
"Many investors seem to overlook Hasbro’s ability to generate substantial licensing revenue from its rich IP library, which includes popular brands such as Transformers, Power Rangers, G.I. Joe, My Little Pony, and more," added Haas.
In light of these findings, Haas has maintained his Buy rating for Hasbro and has raised the price target from $85 to $90. Furthermore, he has revised the earnings estimates for the upcoming years.
According to FactSet, a majority of analysts share a bullish sentiment towards the stock, with 85% rating it as Buy and 15% as Neutral.
Although Hasbro fell short of second-quarter adjusted earnings expectations earlier this month, the company managed to outperform in terms of revenue. As a result, the stock has gained 11% during this year.