BMO Upgrades Hasbro, Eyeing Strong Box Office Tie-Ins

Hasbro, Inc. HAS shares were moving higher Monday after BMO Capital Markets upgraded the toymaker. 

The Analyst

BMO’s Gerrick Johnson upgraded Hasbro from Underperform to Market Perform with a target price lifted from $75 to $88.

The Thesis

While there’s no change in the fundamental outlook for Hasbro, it could get a boost from major movie tie-ins this year, Johnson said in the Monday upgrade note. 

“The stock has now entered the 'Frozen 2' hype cycle,” the analyst said, referring to the upcoming sequel to the massively successful animated fairy tale film 'Frozen.' The sequel is set for a November release, and Hasbro holds the main toy license for the franchise.

Other movie tie-ins for the company that could pay off this year include "Captain Marvel," "Avengers," "Ugly Dolls" and "Star Wars IX," among others, he said. 

Investors could be buying Hasbro on the strength of recent reporting from another toy company, Funko Inc. FNKO, which recently reported strong fourth-quarter earnings and a positive 2019 outlook, Johnson said. 

Hasbro also could benefit from investors having a sense of relief that last year’s big disruption in the toy market — the liquidation of Toys R Us — may have played out, in BMO's view. 

Price Action

Hasbro shares were up 1.92 percent at $89.71 at the time of publication Monday. 

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