Key Stats for Hasbro Stock
- Tuesday’s Performance: 9%
- 52-Week Range: $70 to $107
- Valuation Model Target Price: Around $107
- Implied Upside: Around 20%
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What Happened?
Hasbro stock rose 9% because the company beat Wall Street’s revenue and earnings estimates and raised its full-year revenue-growth, adjusted operating-margin, and adjusted EBITDA forecasts. Revenue increased 16% to $1.14 billion, exceeding the consensus estimate of around $1.1 billion, while adjusted earnings of $1.28 per share surpassed the estimate of around $1.15. Management increased its constant-currency revenue-growth outlook to 5% to 7% from 3% to 5%, raised adjusted operating-margin guidance to 25% to 26% from 24% to 25%, and lifted its adjusted EBITDA forecast to between $1.45 billion and $1.50 billion. The higher outlook showed that Magic’s growth is translating into stronger company-wide earnings rather than producing only a temporary sales boost.
The strongest results came from Wizards of the Coast and Digital Gaming, the division that houses Magic, Dungeons & Dragons, and Hasbro’s digital-game operations. Segment revenue increased 27% to $664 million, led by 32% growth from Magic. The collectible trading-card franchise exceeded $500 million in quarterly revenue for the first time, while Marvel Super Heroes became its fastest release to reach $300 million. During Hasbro’s second-quarter earnings call, CEO Chris Cocks attributed Magic’s momentum to “expanded distribution, real player growth,” and Universes Beyond attracting new fans through familiar intellectual property.
Wizards generated $270 million in operating profit at a 41% margin despite absorbing a $56 million impairment related to digital-game projects planned for 2028 and beyond. Consumer Products, which includes Hasbro’s physical toys and licensed merchandise, grew revenue 5% but recorded an adjusted operating loss of around $8 million due to higher input costs, royalties, and expense timing. This contrast shows that Hasbro’s earnings improvement still depends heavily on the growing contribution from its gaming business.
Hasbro’s results also compared favorably with the latest reported results from Mattel and Spin Master. Mattel’s first quarter produced 4% net sales growth and a $70 million adjusted operating loss, while Spin Master’s first-quarter revenue declined around 9%. Although these are first-quarter figures and Hasbro has now reported its second quarter, Hasbro’s 16% revenue growth and the 41% operating margin generated by Wizards help explain why investors increasingly view it as a higher-margin gaming business rather than only a traditional toy manufacturer.
Wall Street entered the report with tempered expectations. Roth MKM lowered its price target to $100 from $120, Citi reduced its target to $101 from $114, BofA cut its target to $105 from $115, and Jefferies lowered its target to $110 from $120, while all four firms maintained Buy ratings. UBS also reiterated its Buy rating and $110 target ahead of earnings. Every target remained above Hasbro’s closing price near $89. The earnings beat, record Magic performance, and higher 2026 guidance therefore exceeded the cautious setup heading into the quarter.
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Is Hasbro Stock Fairly Valued?
As TIKR’s previous Hasbro analysis explained, the investment case increasingly depends on Hasbro’s shift toward higher-margin gaming and licensing. The latest results strengthened that thesis, but the valuation model still points to a moderate rather than exceptional return.
Under the valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): Around 5%
- Operating Margin: Around 25%
- Exit P/E Multiple: Around 14x
CAGR represents Hasbro’s average annual revenue growth over the forecast period, while the exit P/E estimates how much investors may be willing to pay for each dollar of earnings at the end of that period.
The 5% revenue CAGR matches the lower end of management’s 2026 constant-currency growth outlook of 5% to 7%, but applies that more restrained pace across the entire forecast period. It assumes Magic continues growing, Consumer Products delivers low-single-digit growth, and licensing revenue expands, while allowing company-wide growth to moderate after an unusually strong first half.
The 25% operating-margin assumption is also supported by management’s adjusted operating-margin guidance of 25% to 26%. Wizards margins in the low-40% range and Hasbro’s $150 million cost-transformation target make that level achievable. However, higher royalties, input costs, and spending on digital-game releases could limit further expansion.
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Analysts expect Hasbro’s EBIT to increase from around $1.14 billion in 2025 to around $1.46 billion by 2030, while EBIT margins remain close to 25%. This outlook supports continued profit growth without assuming aggressive margin expansion, making the valuation model more defensible.
The 14x exit P/E sits slightly below Hasbro’s current forward multiple of around 15x. Historical GAAP P/E comparisons are less useful because impairments and restructuring charges have distorted reported earnings. Using a conservative multiple on normalized future earnings provides a cleaner valuation and prevents the projected return from depending on multiple expansion.
Based on these inputs, the model estimates a target price of around $107, implying around 20% upside over approximately 2.5 years, or an annualized return of around 8%.
Over the remainder of 2026, Magic remains Hasbro’s most important earnings driver because management expects low-double-digit Wizards revenue growth and operating margins in the low-40% range.
Continued player growth, strong Marvel reorders, The Hobbit’s early reception, and expanded production capacity will determine whether Magic can sustain its momentum.
Consumer Products could strengthen as Hasbro recoups around $25 million in revenue lost during the second-quarter cyber disruption, although royalties and higher input costs remain meaningful pressures.
Hasbro’s $150 million cost-transformation target and increased 2026 share-repurchase target of at least $200 million could provide additional support for margins and per-share earnings.
At its current price, Hasbro appears fairly valued rather than deeply undervalued. Returns above the model’s annualized 8% estimate will depend on sustained Magic demand, improved Consumer Products profitability, and disciplined digital-game spending.
How Much Upside Does Hasbro Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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