Playful Profits at Hasbro
We look for a 4% increase to $5.6 billion in 2018.
We expect the operating margin to rise 20 basis points this year, to 16.6%, with a further increase to 16.8% in 2018. We look for long-term margin growth to be driven by the company’s Franchise Brands and Entertainment and Licensing business.
We are setting EPS forecasts of $5.00 for 2017, above the consensus of $4.93, and $5.35 for 2018, above the consensus of $5.18. Our estimates assume continued stock buybacks and take account of the company’s history of positive earnings surprises.
Our target price of $128 implies a multiple of 25.6-times our 2017 EPS forecast and a potential total return, including the dividend, of 19% from current levels. Our long-term rating is also BUY.