NEW YORK (TheStreet) -- Shares of Hasbro (HAS) - Get Report tumbled to close lower by 6.36% to $54.65 on Friday, after analysts at BMO Capital said toy sales appear weaker this holiday season and lowered its price target on shares to $55 from $57.
The firm maintained its "market perform" rating on the toy maker, and said that it believes industry sales appear to be soft for the holiday period.
Analysts at the firm added that the domestic toy industry has "taken a turn for the worse in the fourth quarter declining about 2% after being up nearly 4% over the first nine months."
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BMO Capital added that it thinks Hasbro will end up with high levels of unsold inventory which could increase risk of lower margins.
Separately, TheStreet Ratings team rates HASBRO INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HASBRO INC (HAS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HAS's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Leisure Equipment & Products industry. The net income increased by 42.6% when compared to the same quarter one year prior, rising from $126.57 million to $180.46 million.
- Net operating cash flow has significantly increased by 67.13% to -$82.44 million when compared to the same quarter last year. In addition, HASBRO INC has also vastly surpassed the industry average cash flow growth rate of 16.31%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Leisure Equipment & Products industry and the overall market on the basis of return on equity, HASBRO INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: HAS Ratings Report