How Will Hasbro (HAS) Stock Be Affected By This Ratings Upgrade?

NEW YORK (TheStreet) -- Hasbro Inc. (HAS) was upgraded to "overweight" from "equal weight" at Barclays (BCS) on Tuesday.

The firm said it raised its rating on the toy and game maker due to the company's strong point of sale trends, an increase in revenue in its boys' department, and a growth in its girls segment.

Barclays hiked its price target on Hasbro to $59 from $58.

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Shares of Hasbro are up 1.27% to $52.44 in pre-market trading today. 

Separately, TheStreet Ratings team rates HASBRO INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HASBRO INC (HAS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HAS's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • 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 581.0% when compared to the same quarter one year prior, rising from -$6.67 million to $32.09 million.
  • The gross profit margin for HASBRO INC is rather high; currently it is at 57.13%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.72% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: HAS Ratings Report
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