Wall Street Analysts Are Watching These 2 Toymakers Before Earnings

MKM Partners commented on Mattel, Inc. MAT and Hasbro, Inc. HAS ahead of Q1 earnings.

Analyst Eric Handler maintained a Neutral rating on each stock.

Mattel

For Mattel, Handler was “incrementally cautious going into earnings.”

The analyst lowered Q1 2015 estimates based on “stiffer than anticipated FX headwinds” and “concerns that West Coast port issues have resulted in domestic retailers stocking less inventory than typically seen in the post-holiday clean-up quarter.”

Handler reduced the fair value estimate from $25 to $22 based on 14.5x (down from 16x) estimated 2015 EPS of $1.54.

For Q1, the firm expected $884.1 million in revenue and an EPS loss of $(0.11).

Mattel is to report Q1 earnings on April 16 and recently traded at $24.14, up 0.8 percent.

Hasbro

For Hasbro, the analyst “modestly” reduced 1Q estimates and noted that the outlook for 2016 was “appealing but we remain concerned about 2015.”

Handler lowered Q1 estimates based on “stiffer than anticipated FX headwinds” and “concerns that West Coast port issues have resulted in domestic retailers stocking less inventory than typically seen in the post-holiday clean-up quarter,” similar to Mattel.

“While we recognize Hasbro's sizable growth opportunity in 2016 and beyond with Star Wars and Disney Princess, we remain concerned that consensus 2015E estimates are too high and, as a result, the shares might need to pull back (especially given a near-peak 20x current year P/E) before resuming an upward growth trend,” according to Handler.

The firm’s fair value estimate remained $55, based on 17x the 2015 EPS estimate of $3.18.

For Q1, the firm expected $656.8 million in revenue and EPS of $0.11.

Hasbro is to report Q1 earnings on April 20 and recently traded at $64.05, down 0.02 percent.