In a report released today, Megan Alexander from Morgan Stanley maintained a Buy rating on Hasbro, with a price target of $85.00.
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Megan Alexander’s rating is based on Hasbro’s strategic shift towards digital gaming, which is expected to drive long-term earnings growth. The company’s commitment to releasing 1-2 internally developed video games annually, starting with the upcoming title Exodus, represents a significant step in diversifying its revenue streams. Although Exodus may not be immediately profitable, it serves as a critical test for Hasbro’s digital strategy and could enhance investor confidence in the company’s future earnings potential.
Furthermore, Hasbro’s substantial investment in building a robust gaming infrastructure, including new and acquired studios, underscores its dedication to establishing digital gaming as a recurring growth engine. While there are execution risks associated with launching a new IP, the company’s track record with successful third-party collaborations suggests potential for success. Despite the challenges, the long-term prospects of Hasbro’s digital initiatives contribute to the Buy rating, as they are likely to become a more meaningful part of the business over time.