Hasbro's Sell-Off On Toys 'R' Us News Is Played Out

Hasbro, Inc. HAS fell as much as 9.4 percent Monday after reporting marginal earnings beats and soft fourth-quarter guidance, presenting Barclays a buying opportunity.

Considering the lower valuation an “attractive entry point,” the research firm upgraded Hasbro to Overweight.

“We have believed for some time now that Hasbro was a well run company with a strong portfolio of brands,” analyst Felicia Hendrix wrote in a Tuesday note.

Barclays sees positive end-of-year catalysts in the upcoming “Star Wars” film and “Magic: The Gathering” board game release, while the following two years should yield profits from new “Marvel” material and “Frozen 2.”

“The company’s capabilities around content creation and consumer insights, coupled with extensive IT investments to date, a growing franchise brand base, a stable entertainment pipeline, and a versatile management team should all provide Hasbro with competitive advantages in the medium term,” Hendrix wrote, asserting belief in Hasbro’s high demand.

At the same time, Barclays sees Hasbro transitioning Toys R Us inventory to stronger retailers such as Amazon.com, Inc. AMZN, Wal-Mart Stores Inc WMT and Target Corporation TGT, who will compensate for lost Toys R Us sales from the second half of 2017.

Barclays lowered its price target from $111 to $110. At the time of publication, Hasbro was trading up 3.5 percent at a rate of $92.90.

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