Financial Trading Blog
Stock of the day 06/02/2015 – Hasbro Inc
Hasbro had a solid 2014; it started the year at $55.61 before quickly hitting its yearly low of $47.48 at the start of February. However, decent Q2 and Q3 reports saw steady gains, and a spike on November 28th, the day of the new Star Wars trailer, saw it reach a 2014 high of $63.77. Things fell off slightly as it entered the New Year, opening 2015 at $56.63, now trading at $56.18.
Hasbro managed to grow its revenue by 36% in the third quarter, despite missing some analyst targets. More interestingly for Hasbro is not what has gone, but what is coming up in 2015. Last year Hasbro were in talks to buy DreamWorks, but the deal broke down due to its lucrative links to Disney, an insurmountable obstacle for Jeffrey Katzenberg’s company. However it is these very links that give Hasbro the potential for an excellent 2015.
Not only does Hasbro make Transformer, which was just 2014’s top grossing movie, it also owns GI: Joe, My Little Pony, and the perpetually popular Monopoly and Scrabble. Yet bigger still is the merchandise it makes for Disney. Hasbro produces the both Marvel and Star Wars lines of toys, and with success of the Marvel Cinematic Universe set to continue with Avengers: Age of Ulton and Ant-Man, alongside the film-event of the year in the latest Star Wars instalment, Hasbro has two of the hottest film-properties on its hands. On top of this is its acquisition of the rights to produce not only the ‘Disney Princesses’ line, but the overall manufacturing of Frozen toys, starting in 2016. This is a major blow to its main rival Mattel, which star is waning just as Hasbro’s is ascending.
Yet it’s not all fun and games; Mattel’s CEO was forced to resign after the company missed its Q4 targets, and Brian D. Goldner, current Hasbro CEO and soon to be Chairman of the Board, will want to avoid the same fate. Hasbro expects expenses to rise due to the new-product investment, whilst earnings per share are forecast to rise to $1.26 from last year’s $1.12. Other retail companies have seen issues over the holiday season, and with Monday’s announcement encompassing this period, Hasbro might be in for a nasty surprise. However, with the deck stacked in its toy line’s favour, the company will be confident of a strong 2015.
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