Is HAS appropriate for long-term investment?

🚦 Bottom-line: Hasbro (HAS) can be a reasonable long-term holding for investors who 1) want steady dividend income and 2) believe the high-margin Wizards of the Coast/digital gaming engine will keep outgrowing the troubled traditional toy business. However, its success hinges on executing the “Playing to Win” turnaround—particularly cost cuts and supply-chain diversification. If you are comfortable with a mid-teens P/E, mid-single-digit top-line growth, and occasional earnings volatility from tariffs and goodwill write-downs, HAS looks appropriate; if you want cleaner growth stories, you may prefer to stay on the sidelines. 😊📊

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## 1. Key fundamentals at a glance

| Item (latest) | Current level | Why it matters |
| --- | --- | --- |
| Share price | ~$80 on 23-Jul-25, near 52-wk high of $78.83 | Sets valuation and yield |
| Dividend | $0.70 qtrly = $2.80 yr ⇒ ≈ 3.6 % forward yield | Income support; 20-yr uninterrupted payout streak |
| 2025 guidance | Revenue +mid-single-digits; adj. EBITDA $1.17-1.20 B; margin 22-23 % | Indicates margin recovery |
| Adj. EPS run-rate | H1’25 ≈ $2.40 → full-yr street ≈ $4.80 ⇒ fwd P/E ≈ 16-17× | Moderate vs S&P ≈ 20× |
| Long-term debt | $3.33 B (3-31-25) — trending down; target ≤ 2.5× EBITDA by ’26 | Balance-sheet de-risking |
| Cost-saving progress | $320 M realized toward $1 B target by ’27 | Upside to margin quality |

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## 2. Investment positives 🎯

1. Wizards of the Coast & Digital Gaming = growth crown jewel
• Q2 revenue +16 %, Magic: The Gathering +23 %, 10-yr CAGR 13 % .
• High 40-50 % operating margins buffer the low-margin toy business.

2. Visible cash returns
• 3.6 % dividend yield plus buybacks; $98 M returned in Q2 alone .

3. Turnaround economics
• $1 B cost-takeout plan should lift EBIT margin > 22 % by 2025-27 .
• Divestiture of low-return film/TV assets means greater focus on core IP.

4. Brand & licensing moat
• Multi-year renewals with Disney (Star Wars, Marvel) and new casino, streaming, and mobile deals diversify cash flows .

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## 3. Key risks & watch-outs ⚠️

| Risk | Impact | Mitigant to monitor |
| --- | --- | --- |
| Structural decline in Consumer Products (-16 % YoY in Q2) | Keeps consolidated top-line sluggish | Can cost cuts + price/mix offset volume loss? |
| Tariff exposure (China still ~45 % of sourcing) | Drove $1.02 B goodwill impairment; margin drag | Progress toward < 40 % China share by ’27 |
| Lumpy GAAP EPS | Impairments mean headline losses despite healthy cash flow | Focus on adj. EPS & FCF conversion |
| Competitive pressure from Mattel (Barbie halo) & digital entrants | Share erosion in dolls & preschool | Speed of new product pipeline / cross-media launches |

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## 4. Peer-frame valuation

| Company | Fwd P/E | Fwd Yield | Growth catalyst |
| ------- | ------- | --------- | --------------- |
| Hasbro | ~16-17× | ~3.6 % | Wizards, cost cuts |
| Mattel (MAT) | ~15× | 0 % | Barbie slate, IP films |

HAS trades at a small premium to MAT because of its richer dividend and higher-margin gaming mix—but both sit below the market multiple, reflecting toy-sector cyclicality.

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## 5. Suitability checklist ✅

1. Income need? ✔ Yes—above-market dividend, well-covered by FCF.
2. Time horizon ≥ 3-5 yrs? ✔ Needed to let turnaround play out.
3. Risk tolerance moderate? ✔/✖ Accept tariff & cyclical swings.
4. Looking for secular hyper-growth? ✖ Better alternatives exist.

If those boxes align with your goals, building a position on pullbacks below ~$75 (yield > 3.7 %) could make sense. Otherwise, monitor execution progress through each quarterly Wizards update before committing fresh capital.

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*Happy investing & may your portfolio keep “playing to win”! 🎲✨*