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Why Hasbro Moved Up Another 5% Today

By Howard Smith – Sep 30, 2020 at 12:21PM

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The toymaker has been receiving recent upgrades from analysts.

What happened

Shares of toymaker Hasbro (HAS -0.10%) moved up nearly 5% today, continuing recent gains that have boosted the stock more than 10% in the past week. 

So what

Stifel analyst Drew Crum upgraded Hasbro today from a hold to a buy rating and boosted its price target from $73 to $100 per share. The new target price represents 23% upside from yesterday's closing price. The move follows another analyst upgrade from last week. BMO Capital moved the company to outperform with a price target of $90 on Sept. 23. 

children playing with colored clay.

Image source: Getty Images.

Shares are up more than 8% since BMO analyst Gerrick Johnson said he sees an "improving outlook for the toy industry," and that he expects a strong holiday season to be better than investors currently expect. 

Now what

Johnson said that large store and online retailers are placing "solid orders" for the upcoming season. He expects particular strength in board games, outdoor toys including Nerf, and activity toys such as Play-Doh. 

Crum believes the investment is more of a value play. He points out that though shares have partially recovered from March lows, they remain down 30% from a year ago. At the current price -- even after factoring in this week's surge -- Hasbro looks to be an intriguing income stock. Shares currently yield more than 3.25%, a level not seen in more than five years. 

A strong holiday season could be the catalyst for shares to fully return to pre-pandemic levels, which is where Crum's price target lies. 

Howard Smith owns shares of Hasbro. The Motley Fool owns shares of and recommends Hasbro. The Motley Fool has a disclosure policy.

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