Goldman Sachs Reiterates Conviction Buy Rating on Hasbro (HAS)

Goldman Sachs is out with a research report this morning, where it reiterates its Conviction Buy rating on Hasbro Inc. HAS; it has a $58.00 price target on the stock. The GS analysts cited the company's recent earnings results, which was shy of estimates. Revenues and gross margins were above expectations, however, this was offset by higher SG&A costs and dilution from its TV venture. The analysts continue to believe that the company is on the verge of a multi-year sales/earnings inflection, beginning in 2Q11. There were some puts and takes in 1Q (i.e., SG&A levels and inventory days), however, they believe these issues are likely to be overwhelmed by an acceleration in sales from 2Q. As for valuation, the analysts remarked, “We tweak our 2011/2012/2013 EPS estimates to $3.33/$3.85/$4.55 from $3.35/$3.90/$4.59 primarily to reflect this quarter's EPS miss. We lower our 12-month P/E and DCF-based price target by $1 to $58 to reflect our lower estimates. This equates to 15x forward EPS and implies 30% upside to shares.”