Summary
- Hasbro shares have been trading in a downward trend since the beginning of 2017. In recent weeks, however, the share price has significantly exceeded this trading range.
- Although a beat of the estimated results is likely, I would wait for the final Q2 results.
- The fundamental criteria indicate a high overvaluation. According to my analysis, this can not be justified by other considerations such as extreme growth potential.
- The changing habits of consumers with toys have led the company to face more and more competitors. Whether Hasbro can keep up here must first be seen.
Introduction
In recent quarters, Hasbro had to contend with two particular problems. After the sudden collapse of Hasbro Toys 'R' Us, Hasbro had to find new avenues to sell its products.
Furthermore, Hasbro faces changing consumer shopping trends:
- Bricks and mortar retail is struggling.
- E-commerce is on fire and there is no end in sight to Amazon's almost exponential growth. Millennials are less likely to drive to a store than their Boomer parents and grandparents.
Given that, the Hasbro shares have been trading in a downward trend since the beginning of 2017. In recent weeks, however, the share price has significantly exceeded this trading range:
(Source: Hasbro's trading range since 2017)
This is a clear buy signal and could be a good buying opportunity. However, in the following I would like to analyze whether the company is also a buy from a fundamental point of view or not.
