Hasbro Continues to Take Incremental Share in 2017
We don't plan any material change to our $91 fair value estimate for the narrow-moat toymaker.
Despite slowing toy category sales in the first quarter, hindered by a later Easter, narrow-moat
Our long-term prognosis for Hasbro is intact, incorporating low-single-digit top-line sales growth domestically and high-single-digit sales growth internationally, which should help the company take modest share of the toy category. Our more recent concern has been the ability to capture robust growth on the heels of Star Wars: The Force Awakens success, which has led the 2017 earnings multiple to expand to more than 20 times, while earnings per share rise at a single-digit pace. Longer term we forecast EPS growth at a high-single-digit pace as operating leverage and share buybacks help improve SD&A expenses, leading to operating margins around 18% from 16.4% in 2016.
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