Hasbro (HAS) - Get Report , owner of such iconic brands as Monopoly, Play-Doh and Transformers, was climbing 3% to $99.02 Monday after a UBS analyst upgraded shares of the toy and entertainment company to buy from neutral with a $117 price target.
UBS analyst Arpine Kocharyan said that expectations for the Pawtucket, Rhode Island-based company have seen a "meaningful reset" after weak third-quarter results. He sees upside in the stock due to better-than-expected revenue and cost synergies from its acquisition of Entertainment One, momentum in its gaming portfolio. and doll sales after Disney's
"Frozen 2" opened in theaters Friday.
"The stock appears to be pricing in a lackluster holiday season, combined with further tariff disruption and no upside to $130 million of initial synergy guide," he said. However, Kocharyan also said his point-of-sales checks indicate a fourth-quarter pickup.
In August, Hasbro said it was acquiring Entertainment One (ENTMF) for $4 billion in cash. Entertainment One is a U.K.-based content provider responsible for Peppa Pig and other video and film properties.
Last week, the UK's Competition and Markets Authority said it had launched a review of the proposed acquisition. Hasbro said it still expects to close the deal no later than the first quarter of 2020.
Last month, Hasbro posted weaker-than-expected third-quarter earnings , saying that tariffs linked to the U.S.-China trade dispute clipped sales to retailers. Adjusted earnings were $1.84 a share, down 4.6% from the same period in 2018 and well shy of the Wall Street consensus forecast of $2.21. Revenue was largely flat from a year earlier at $1.58 billion, but again missed analysts' estimates of $1.71 billion.