Analyst Previews Funko, Hasbro And Mattel Earnings: Will We See A Pop?

Pop! figure makers Funko Inc FNKO shares were popping on Monday, and Stifel predicts the Buy-rated stock was the best of the toymakers in the second quarter. Stifel said Funko likely gained share in the quarter on the strength of its signature Pop! figures.

The Analyst

Stifel’s Drew Crum reiterated a Buy rating on Funko and raised the target price from $27 to $28.

Crum has a Hold rating on Mattel Inc MAT with a target price of $13. Crum kept a Hold rating on Hasbro, Inc. HAS, but raised the target price from $95 to $99.

Hasbro reports second quarter results July 23, Mattel reports second quarter results on July 25. Stifel expects Funko to report its second-quarter earnings around Aug. 8.

The Theses

Funko is the best pick of the three at the moment, according to Crum, who said the toymaker was one of Stifel’s highest conviction Buy ratings. He’s estimating AEBITDA up 25% in the second quarter with revenue up 24%, generally in line with sell-side peers.

Crum said Funko’s share was generally higher year-over-year on the strength not just of the popular Pop! figures, but also had significant share in online sales in Mexico and gains in Europe and China.

Hasbro

Crum is more bullish on Hasbro than the consensus, estimating EPS of 57 cents and revenue up 8%, which would represent a record second quarter for Hasbro if he’s right.

“The anticipated increase reflects improvement for Nerf, a strong quarter for Marvel, and the re-launch of Power Rangers,” Crum said, noting that strength showed up in checks of sales on Amazon, which showed Hasbro leading placement in the U.S. and Europe.

While Hasbro generally looks good in the near term, the stock is also expensive, keeping Crum from recommending a buy.

Mattel

While Stifel has estimated a $5 million loss for Mattel, Crum says the company is making progress in a “structural simplification” program. Still, revenue is expected to be down about 4% with the anticipated year-over-year sales drop based on lingering effects of the Toys R Us liquidation and reduced sales in China among other factors.

Crum noted, however, that Mattel did have its best Amazon sales performance since 2016 in the quarter with top sellers including Uno and Phase 10 games, along with Barbie and Fisher-Price toys.

There are near-term concerns, however, including tariffs and Fisher-Price recalls, Crum said.

Price Action

Funko traded higher by 6% to $22.84 on Monday. Mattel shares were up 0.75% to $12.06, while Hasbro shares were up 0.44% at $109.75.

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