Jefferies, B of A Securities, Citigroup, Roth Capital, BNP Paribas (Outperform), Morgan Stanley (Overweight), UBS, JP Morgan (Overweight), Goldman Sachs — Buy maintained Feb–Jul 2026. Wells Fargo (Equal Weight) and DA Davidson (Neutral) at Hold.
Hasbro, Inc., founded in 1923 and headquartered in Pawtucket, RI, operates the global play and entertainment business across three segments: Consumer Products (traditional toys and games — action figures, Play-Doh, Nerf, Monopoly, Transformers, plus out-licensing of brands into apparel, publishing, and electronics), Wizards of the Coast & Digital Gaming (Magic: The Gathering, Dungeons & Dragons, and digital titles including Monopoly Go and MTG Arena), and Entertainment (Peppa Pig, PJ Masks, and residual film/TV content following the 2023 divestiture of the eOne studio business to Lionsgate).
FY2025 (ended Dec 28, 2025) revenue rose 13.7% YoY to $4,701.3M, driven by a record year at Wizards of the Coast & Digital Gaming (segment revenue +44.7% to $2.2B, >$1.0B operating profit at a 46.0% margin) built on Magic: The Gathering's best year ever ($1.72B, +59% FY) powered by "Universes Beyond" crossover sets — Final Fantasy was the highest-selling Magic set of all time by net revenue. GAAP results, however, show a net loss of $(322.4)M ($(2.30) diluted EPS), almost entirely the result of a $1,021.9M non-cash goodwill impairment in the Consumer Products segment booked in Q2 2025, triggered by an interim goodwill assessment after new China-sourced-toy tariffs reset the segment's long-term margin outlook. Excluding the impairment, Hasbro delivered a company-record adjusted operating profit of ~$1.1B (24.2% margin, +~400bps YoY) and adjusted diluted EPS of $5.54 — free cash flow of $829.9M was also a 5-year high, so the loss did not impair cash generation.
The stock trades below both its 50-day ($85.79) and 200-day ($86.60) moving averages, roughly 24% off its 52-week high of $106.98, and Zacks flagged it as technically oversold in early July 2026. Hasbro reports Q2 2026 results on July 21, 2026 — the day after this report's date — making the print an immediate catalyst; last quarter's EPS beat consensus by 31.3%.
Wizards of the Coast is the crown jewel funding the turnaround. A 46.0% segment operating margin and record Magic: The Gathering growth mean Wizards now generates more than the entire company's operating profit did just a few years ago, subsidizing the Consumer Products recovery with an asset-light, high-margin, IP-licensing-and-digital revenue stream largely insulated from tariffs and physical-goods logistics.
"Playing to Win" cost program is most of the way home. Hasbro has banked ~$800M of its $1.0B gross cost-savings target through 2025; the remaining ~$200M drops largely to Consumer Products margin (management targets 6–8% segment operating margin) even absent a toy-category recovery, and licensing/digital expansion (out-licensing, Monopoly Go, D&D Beyond) shifts mix toward higher-margin, lower-capital revenue.
Deleveraging from the eOne era continues. Net debt has fallen from a $3.51B FY2022 peak to $2.62B, funded by FCF that hit a 5-year high of $829.9M in FY2025 — more than 2x dividend coverage ($392.5M paid) — even in a GAAP net-loss year, evidence the impairment is a non-cash accounting reset, not a cash-flow problem.
Valuation and income profile. At $81.55, HAS trades at 14.7x adjusted FY2025 earnings and ~10.7x adjusted EV/EBITDA (est.), with a 3.43% dividend yield and a 0.48 beta — a defensive, income-generating setup relative to both its own five-year multiple history and consumer-discretionary peers, priced for skepticism on Consumer Products' durability rather than for the Wizards growth engine.
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $6,420 | $5,857 | $5,003 | $4,136 | $4,701 |
| Revenue Growth YoY | — | −8.8% | −14.6% | −17.3% | +13.7% |
| Gross Profit | $3,873 | $3,452 | $2,869 | $2,672 | $3,303 |
| Gross Margin | 60.3% | 58.9% | 57.3% | 64.6% | 70.3% |
| Operating Income | $763 | $408 | $(1,539) | $690 | $1,058 |
| Operating Margin | 11.9% | 7.0% | (30.8)% | 16.7% | 22.5% |
| EBITDA | $1,670 | $1,221 | $(863) | $881 | $233 |
| EBITDA Margin | 26.0% | 20.8% | (17.3)% | 21.3% | 5.0% |
| Net Income | $429 | $204 | $(1,489) | $386 | $(322) |
| Net Margin | 6.7% | 3.5% | (29.8)% | 9.3% | (6.9)% |
| EPS (Diluted) | $3.10 | $1.47 | $(10.73) | $2.75 | $(2.30) |
| R&D / Development Expense | $316 | $308 | $307 | $294 | $386 |
| Interest Expense | $180 | $171 | $186 | $171 | $163 |
FY2023 net loss reflects impairments tied to the 2019 Entertainment One (eOne) acquisition; FY2025 net loss reflects a $1,021.9M non-cash Consumer Products goodwill impairment (see §3). Fiscal year = calendar year for Hasbro (Dec year-end).
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Cash & ST Investments | $983 | $499 | $545 | $695 | $882 |
| Total Current Assets | $3,728 | $2,999 | $2,324 | $2,243 | $2,584 |
| Total Assets | $10,038 | $9,296 | $6,541 | $6,340 | $5,552 |
| Total Debt | $4,069 | $4,006 | $3,496 | $3,411 | $3,401 |
| Net Debt | $3,086 | $3,508 | $2,952 | $2,716 | $2,625 |
| Total Liabilities | $6,951 | $6,434 | $5,454 | $5,155 | $4,987 |
| Total Stockholders' Equity | $3,026 | $2,833 | $1,062 | $1,158 | $539 |
| Debt / Equity | 1.34x | 1.41x | 3.29x | 2.95x | 6.32x |
| Current Ratio | 1.52x | 1.37x | 1.13x | 1.60x | 1.38x |
| Goodwill & Intangibles | $4,592 | $4,285 | $2,867 | $2,797 | $1,713 |
Equity and Debt/Equity in FY2025 reflect the $1,021.9M goodwill write-down flowing through retained earnings, not a change in operating leverage. Goodwill & Intangibles fell from $4.59B (FY2021) to $1.71B (FY2025) across the eOne divestiture (2023) and the FY2025 Consumer Products impairment.
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $818 | $373 | $726 | $847 | $893 |
| Capital Expenditures | $(133) | $(174) | $(209) | $(87) | $(63) |
| Free Cash Flow | $685 | $199 | $516 | $760 | $830 |
| FCF Margin | 10.7% | 3.4% | 10.3% | 18.4% | 17.7% |
| Dividends Paid | $(375) | $(385) | $(388) | $(390) | $(393) |
| Stock Buybacks | $0 | $(125) | $(17) | $0 | $0 |
| Net Debt Issuance / (Repayment) | $(1,082) | $(61) | $(357) | $(88) | $(118) |
| D&A | $909 | $788 | $660 | $212 | $171 |
Revenue troughed in FY2024 ($4.14B) after three straight declining years (post-COVID toy destocking plus the eOne divestiture), then re-accelerated +13.7% in FY2025 on Wizards of the Coast strength. FCF hit a 5-year high of $829.9M in FY2025 despite the GAAP net loss — the goodwill impairment is entirely non-cash.
Total debt — a legacy of the $4B, largely debt-funded 2019 eOne acquisition — has declined from $4.07B (FY2021) to $3.40B (FY2025). Net debt peaked at $3.51B in FY2022 and has fallen to $2.62B as cash builds from rising FCF, a steady but unhurried deleveraging path rather than a resolved balance sheet.
Gross margin has expanded every year since FY2023 (57.3% → 70.3% FY2025) as mix shifts toward high-margin Wizards/digital revenue and the "Playing to Win" cost program takes hold. Operating margin of 22.5% in FY2025 is the best of the five-year window — the negative net margin in FY2023 and FY2025 is a GAAP-impairment artifact below the operating line, not an operating-profitability problem.
| Multiple | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| P/E (trailing, GAAP) | 26.3x | 55.5x | n/m | 29.7x | n/m |
| EV/EBITDA (GAAP) | 8.6x | 12.2x | n/m | 16.1x | n/m |
| P/S (Price/Sales) | 1.76x | 1.93x | 2.26x | 2.77x | 2.43x |
| P/B (Price/Book) | 3.73x | 4.00x | 10.66x | 9.89x | 21.23x |
| P/FCF | 16.5x | 57.0x | 21.9x | 15.1x | 13.8x |
| EV/Sales | 2.24x | 2.53x | 2.85x | 3.42x | 2.97x |
| P/E (Adjusted, non-GAAP) | — | — | — | — | 14.7x |
| EV/EBITDA (Adjusted, non-GAAP, est.) | — | — | — | — | 10.7x |
GAAP P/E and EV/EBITDA are n/m (not meaningful) in FY2023 and FY2025 due to impairment-driven net losses ($1,489.3M largely eOne-related in FY2023; $322.4M driven by the $1,021.9M Consumer Products goodwill write-down in FY2025). FY2025 adjusted (non-GAAP) diluted EPS was $5.54 per company disclosure; adjusted EBITDA is estimated at ~$1.31B (disclosed adjusted operating profit ~$1.14B, a 24.2% margin, plus reported D&A of $171.3M) — company FY2026 guidance of $1.4–1.45B adjusted EBITDA implies ~7–11% growth off this base. All multiples at current price $81.55 using FY-end diluted share counts; EV = market cap + total debt − cash & ST investments (FY2025: $11,433.9M + $3,401.1M − $882.0M ≈ $13.95B).
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Return on Equity (ROE) | 14.2% | 7.2% | (140.2)% | 33.3% | (59.9)% |
| Return on Assets (ROA) | 4.3% | 2.2% | (22.8)% | 6.1% | (5.8)% |
| Return on Invested Capital (ROIC) | 7.3% | 4.3% | (26.7)% | 11.0% | 25.1% |
| Asset Turnover | 0.64x | 0.63x | 0.76x | 0.65x | 0.85x |
| Inventory Turnover | 4.61x | 3.55x | 6.43x | 5.34x | 5.38x |
| Days Sales Outstanding | 85.3 | 70.6 | 75.1 | 81.2 | 82.3 |
| Free Cash Flow Yield | 5.0% | 2.5% | 7.3% | 9.8% | 7.1% |
| Interest Coverage (EBIT/Int Exp) | 4.25x | 2.38x | (8.26)x | 4.03x | 6.47x |
| R&D as % of Revenue | 4.9% | 5.3% | 6.1% | 7.1% | 8.2% |
ROE/ROA are negative in FY2023/FY2025 mechanically from GAAP net losses; ROIC (FMP methodology, NOPAT-based) stayed positive in FY2025 since it is computed off operating earnings before the below-the-line impairment charge. R&D/development spend has risen steadily as a share of revenue (4.9% → 8.2%) alongside the digital-gaming investment ramp.
| Metric | FY2025A | FY2026E | FY2027E | FY2028E |
|---|---|---|---|---|
| Revenue (avg) | $4,701M | $4,999M | $5,330M | $5,464M |
| Net Income (avg) | $(322)M GAAP | $840M | $895M | $982M |
| EPS (diluted, avg) | $5.54 Adj | $5.98E | $6.37E | $6.96E |
| Fwd P/E (at $81.55) | 14.7x | 13.6x | 12.8x | 11.7x |
| EPS Growth YoY | — | +7.9% | +6.5% | +9.3% |
| PEG Ratio (Fwd P/E / EPS Gth) | — | 1.73x | 1.97x | 1.26x |
FY2025A EPS shown is the company's disclosed adjusted (non-GAAP) diluted EPS of $5.54, used as the base for Fwd P/E since GAAP FY2025 EPS was $(2.30). FY2026E–FY2028E revenue/EPS are FMP long-range street consensus (7–10 analysts per metric; net income and EPS estimate panels are not always identical, so implied margins can look slightly inconsistent quarter to quarter). PEG = Fwd P/E ÷ forward EPS growth %. Price targets from a separate broker price-target panel (1/6/17 analysts for month/quarter/year windows). All at current price $81.55. HAS reports Q2 2026 results July 21, 2026 — one day after this report.
Unlike buyback-driven mega-caps, Hasbro's diluted share count has been essentially flat (138.4M → 140.2M, +1.3% over 5 years) — buybacks were minimal to nonexistent in 4 of the last 5 years while the dividend was raised steadily every year ($374.5M → $392.5M paid). Capital return priority is clearly the dividend, not repurchases, while the balance sheet deleverages.
| Filing Date | Name | Title | Type | Shares | Avg Price | Value |
|---|---|---|---|---|---|---|
| 2026-07-01 | Lisa Gersh | Director | Award | 783 | $0.00 | RSU Grant |
| 2026-07-01 | Richard S. Stoddart | Chair of the Board | Award | 144 | $0.00 | RSU Grant |
| 2026-07-01 | Douglas S. Bowser | Director | Award | 419 | $0.00 | RSU Grant |
| 2026-06-15 | Richard S. Stoddart | Chair of the Board | Award | 2,224 | $0.00 | Annual Equity Grant |
| 2026-05-19 | Gina M. Goetter | EVP & CFO | Tax W/H | 9,796 | $95.13 | $932.0K |
| 2026-05-19 | Timothy J. Kilpin | President, Toy Lic. & Ent. | Tax W/H | 5,939 | $95.13 | $565.0K |
| 2026-05-19 | Jason M. Bunge | Chief Marketing Officer | Tax W/H | 1,469 | $95.13 | $139.8K |
Trailing ~60-day activity is dominated by routine director RSU/stock-unit grants (Form 4 "A-Award," $0 value, scheduled board compensation) and officer "F-InKind" tax-withholding dispositions tied to RSU vesting on May 17, 2026 (Kilpin, Goetter, Bunge) — standard sell-to-cover mechanics, not discretionary open-market sales. No open-market purchases or sales by officers or directors in the window; the pattern reflects routine compensation administration, not a directional signal ahead of the July 21 earnings report.
Wizards of the Coast compounds into the profit engine. A 46.0% segment operating margin and a record Magic: The Gathering year ($1.72B, +59%) built on "Universes Beyond" crossovers show the franchise still has fresh growth levers (new IP tie-ins, digital MTG Arena engagement, Dungeons & Dragons). If this segment sustains mid-teens-plus growth, consolidated adjusted EBITDA can clear the FY2026 $1.4–1.45B guide and keep climbing toward $1.6–1.7B by FY2027–28.
Playing to Win finishes the job. With ~$800M of the $1.0B gross cost-savings target already banked, the final ~$200M converts directly to Consumer Products margin (targeted 6–8%) without needing a toy-category recovery — pure execution upside on a segment the market has largely written off.
Licensing and digital reduce cyclicality. Out-licensing of Hasbro IP into apparel, publishing, and electronics, plus digital titles (Monopoly Go, D&D Beyond), are asset-light, higher-margin, and far less exposed to China-sourced-toy tariffs than owned manufacturing — a structural mix shift the FY2025 gross-margin expansion (57.3% → 70.3% since FY2023) already shows.
Deleveraging plus income support the multiple. FCF at a 5-year high of $829.9M funds >2x dividend coverage and continued net-debt paydown (from a $3.51B FY2022 peak to $2.62B). At 14.7x adjusted earnings, 3.43% yield, and 0.48 beta, HAS is priced more like a value/income name than for the growth actually embedded in Wizards.
Tariffs are a live, recurring earnings risk. China-sourced-toy tariffs already forced a $1.0B non-cash goodwill impairment once in FY2025 and management guides ~$60M of incremental tariff cost for FY2026. Further trade-policy escalation could force another impairment or a lower structural Consumer Products margin ceiling than the 6–8% target implies.
Franchise concentration. Wizards of the Coast/Magic: The Gathering now generates >45% of consolidated segment operating profit from what is functionally a single card-game IP. FY2025's record was driven by a hard-to-repeat comp (Final Fantasy, the highest-selling set ever); any product-cadence miss, collector fatigue, or digital-card competition creates outsized consolidated earnings risk.
GAAP earnings are not a reliable year-over-year comparator. Two of the last five fiscal years (FY2023, FY2025) posted large GAAP net losses from non-cash impairments tied to the 2019 eOne acquisition and its aftermath. Book equity has been crushed to $538.5M, pushing GAAP Debt/Equity to an optically alarming 6.32x — a reminder that "restructuring is done" claims at Hasbro have proven premature before.
Consumer Products and Entertainment still need to prove it. The legacy toy category faces secular screen-time substitution and retailer price pressure, the Consumer Products margin recovery is a target not yet delivered, and Entertainment declined further in FY2025 with a thin post-eOne content pipeline and no articulated growth plan.
Consumer Products remains reliant on China-sourced toy manufacturing. Tariffs already triggered the FY2025 $1,021.9M Consumer Products goodwill impairment via a forced interim assessment; management guides ~$60M of incremental FY2026 tariff cost. Further escalation is a direct, recurring earnings and possible re-impairment risk.
Wizards of the Coast & Digital Gaming generated >45% of consolidated segment operating profit in FY2025, with Magic: The Gathering as the core driver. A product-cadence miss or slowdown after a record "Universes Beyond" comp year creates outsized consolidated earnings risk from essentially one franchise.
Net debt of $2.62B is a legacy of the largely debt-funded 2019 Entertainment One acquisition. Deleveraging is real but gradual, and GAAP book equity has been crushed to $538.5M by the FY2025 impairment, elevating headline leverage optics even though FCF coverage remains healthy.
Two of the last five fiscal years (FY2023, FY2025) posted large GAAP net losses from non-cash impairments. Headline EPS is not a reliable year-to-year comparator, forcing reliance on adjusted (non-GAAP) figures that management controls the definition of — a valuation risk if adjustments prove less "one-time" than presented.
Traditional toys face screen-time/digital-entertainment substitution and retailer price compression (Amazon, mass discounters). The 6–8% Consumer Products operating-margin target is a management goal, not yet a delivered result — the FY2025 impairment is direct evidence the market had over-estimated this segment's durable earnings power once already.
Entertainment revenue declined further in FY2025 with a thin post-eOne-divestiture content pipeline (Peppa Pig, PJ Masks). Digital-gaming R&D spend has risen to 8.2% of revenue (from 4.9% in FY2021); this investment must convert to durable engagement, not one-off hit titles, to justify the spend.
| Scenario | FY2026E Adj EPS | Target P/E | EV/Fwd EBITDA | Implied Price | vs. $81.55 |
|---|---|---|---|---|---|
| Bull | $6.30 | 17.0x | ~11.7x | $107 | +31.3% |
| Base | $5.98 | 14.9x | ~10.6x | $89 | +9.3% |
| Bear | $4.80 | 12.0x | ~10.4x | $58 | −29.4% |
Bull case ($107, +31%): Wizards of the Coast momentum continues past FY2025's record comp, the Consumer Products margin recovery arrives ahead of the 6–8% target as the last of the $1.0B "Playing to Win" savings lands, and tariff impact is contained to the guided ~$60M. Adjusted EPS reaches ~$6.30 and the market re-rates HAS toward 17x forward earnings — crediting the business more like a royalty/IP compounder given Wizards' 46% segment margin — cross-checking to ~11.7x EV/EBITDA on ~$1.5B adjusted EBITDA and further net-debt paydown. This is close to the current Street consensus 1-quarter price target of $107.
Base case ($89, +9%): Revenue and adjusted EPS land in line with FMP consensus (~$5.98), and the forward multiple holds near today's ~14.9x as the market stays show-me on Consumer Products durability pending further quarters of proof. EV/Fwd EBITDA of ~10.6x on the FY2026 guided adjusted EBITDA midpoint ($1.425B) is broadly in line with recent history. This is the "steady execution, no re-rating yet" outcome and sits closest to the consensus 1-year price target of $105.53.
Bear case ($58, −29%): Tariff escalation forces a further Consumer Products margin reset or a second impairment, and Magic: The Gathering growth decelerates sharply off the hard-to-repeat Final Fantasy/Avatar comp. Adjusted EPS falls to ~$4.80 and the multiple compresses to 12x as investors re-price the "recurring impairment" risk flagged in §16 — a real tail scenario given two net-loss years in the last five, not a base case, but the magnitude argues for position-sizing discipline around the July 21 print.
Scenarios framed on forward P/E × FY2026E consensus adjusted EPS, cross-checked against EV/Fwd EBITDA — the appropriate consumer-discretionary lens given normalized (non-GAAP) earnings are the only comparable year-over-year metric for HAS. P/B is not used as a primary lens since FY2025 book value is impairment-depressed and not representative of ongoing earnings power. All prices at current $81.55. Not investment advice.
This report was generated using FMP financial data as of 2026-07-20. This is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.