Hasbro's (HAS) valuation multiple has compressed further even at a time when its business is inflecting, with Wizards segment revenue potentially exceeding the Consumer Products business at roughly six to seven times the profitability of the toy business, UBS Securities said Monday in an emailed note.
Volume is the key driver of gaming margins, so Hasbro delivering more than 45% of underlying margin for the Wizards segment, adjusted for impairment, against low-double-digit growth for the year implies second half Wizards margins in the low 40s% range, according to the note.
Hasbro has not yet disclosed the timing of its new launches, but Exodus launch is expected in early 2027, followed by Warlock in the second half. The combined cost of the two games could be roughly $330 million, not all of which is amortizable, the note added.
UBS raised its 2027 EPS estimate to $6.83 from $6.27, and lifted its full-year 2026 EPS estimate to $6.16 from $5.78. It now expects full-year 2026 revenue growth of 7.1%, at the upper end of the 5% to 7% guidance range, as the company's implied guidance for the back half leaves room for upside, the brokerage said.
UBS maintained a buy rating on Hasbro and raised its price target to $120 from $110.
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