Hasbro, Inc. (NASDAQ:HAS) started the year on its best foot if the last earnings report is anything to go by. Notably, the company delivered a shock to short sellers when it reported net income of around $26.7 million, against consensus estimates which anticipated a net loss. The toy maker is reaping from improved performance in its crucial markets like Europe and the US.
Hasbro targets profitable growth during FY2019
During the month of January, the HAS stock dropped to $77.90 a share. In particular, the underperformance was attributed to the problems which were facing the company’s business partner, Toys R Us. Toys R Us, is one of the largest distributors of toys in North America and it supplied a huge amount of Hasbro’s products. However, problems began in 2018 when the company filed for bankruptcy. By March, the distributor was eyeing customers who would buy up around 700 stores under its management.
However, the Q1 FY2019 earnings report changed the stock’s investor sentiment leading to a rally which saw the stock touch $104.75, an all-time high year-to-date. Notably, consensus estimates put the company’s net income in the negative but the results delivered a shock. In particular, the company had some new projects like the Avengers: Endgame which generated record income. Further, HAS holds the license to produce toys for Disney and other franchises through to 2020 and that is likely to deliver more positive news on the net income front.
What next for HAS for the rest of 2019?
Last year, HAS stock underperformed where it generally earned $1.74 per share. However, analysts expect that the value will increase threefold before end of the year 2019. This is on the basis of a predicted 11% growth in earnings in 2020. Further, data available on S&P Global Market Intelligence indicates that in the next five years, HAS stock will expand at 10.5% on average. The expected turnaround will be predicated on the improvement of business in the company’s commercial markets.
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