Hasbro Inc. (HAS) plans a shift toward strategic associations with Discovery, Universal Pictures, Electronic Arts and Mediaset, as well as aggressive penetration into emerging markets. However, most of its agreements will not materialize before late 2011.
We remain cautious on the stock due to increasing input costs as well as wage inflation, and currency fluctuation. Moreover, weaker-than-expected holiday sales left sufficient inventory on retailers as well as the company’s books. This resulted in lower reordering from retailers, tempering first quarter 2011 outlook.
Although its dividend hike is a positive for Hasbro, Mattel is not far behind in this respect. Hence, we downgrade the stock from Neutral to Underperform.
HASBRO INC (HAS): Free Stock Analysis Report
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