Morgan Stanley's analyst Megan Alexander has recently upgraded the price target for NASDAQ:HAS, setting it at $79 from its current trading price of $62.05. This new target suggests a potential upside of 27.32%, indicating a strong confidence in Hasbro's future performance. The adjustment was announced on July 26, 2024, and has been covered by TheFly, pointing towards a bullish outlook for the company. This optimism by Morgan Stanley is rooted in Hasbro's recent financial achievements and strategic shifts, particularly in its digital gaming segment.
Hasbro, a well-known toy and board game company, has exceeded Wall Street's expectations for the second quarter, primarily due to its expanding digital gaming division. The company reported a net income of $138.5 million, a significant recovery from a net loss of $234.9 million in the previous year's second quarter. This turnaround is largely attributed to Hasbro's focus on and successful execution within its digital gaming sector, showcasing the company's adaptability and strategic planning.
In detail, Hasbro's earnings per share stood at 99 cents, contrasting sharply with a loss of $1.69 per share in the same period last year. Despite a decline in overall revenue by 18%, the Wizards of the Coast and digital gaming segments saw a revenue increase of 20%. This growth has been crucial in offsetting the declines in consumer product revenue and the substantial drop in entertainment segment revenue, which fell by 90% due to the divestiture of the production studio eOne. The company's pivot towards digital gaming and the successful launch of new initiatives under its Wizards of the Coast brand have been pivotal in driving Hasbro's recent success.
The market has responded positively to Hasbro's strategic direction and its ability to overcome industry challenges, with shares rising more than 4% in early trading following the announcement. This investor confidence is reflected in the stock's performance, with NASDAQ:HAS experiencing a modest increase of $0.53, or approximately 0.86%, trading between $61.25 and $63.15 on the day of the report. Currently, Hasbro's market capitalization is around $8.64 billion, with a trading volume of 221,068 shares, indicating a stable interest in the company's stock amidst its strategic transformations and financial recovery.