Market Overview

Assessing The Toys 'R' Us Liquidation's Impact On Hasbro, Mattel And JAKKS

Assessing The Toys 'R' Us Liquidation's Impact On Hasbro, Mattel And JAKKS
Related MAT
8 Stocks Moving In Thursday's After-Hours Session
Mattel's Q3 Earnings Preview
FAO Schwarz makes NYC comeback (Seeking Alpha)
Related HAS
Insider Buys Of The Week: GE, Hasbro, Tesla
10 Biggest Price Target Changes For Tuesday

While it didn’t come as a surprise, the Toys R Us bankruptcy was sent toy manufacturers scrambling to recoup potentially significant losses after it was announced that the company will close all of its stores.

Earlier this month, BMO Capital Markets analyst Gerrick Johnson told Benzinga that toy giants Mattel, Inc. (NASDAQ: MAT) and Hasbro, Inc. (NASDAQ: HAS) are "being proactive and getting their affairs" in preparation for the store shutdowns. 

In a new report, Johnson said he's expecting the disruption to the industry and the companies under coverage “to be greater than originally anticipated." 

With liquidation set to begin immediately and targeted for completion by July 31, the analyst said the outcome of the sale process for international stores is unknown until mid-April, and it is still unclear what any buyer will do with the stores.

For Hasbro, Johnson reduced the 2018 net revenue estimate by $107 million to $5.104 billion. In 2019, 75 percent of lost Toys R Us sales will be made up elsewhere, the analyst said. BMO maintains a Market Perform rating on Hasbro with a price target lowered from $96 to $83.

The impact on Mattel is expected to be larger. Johnson lowered the 2018 net revenue estimate for the toymaker by $150 million to $4.642 billion. BMO expects a drop in revenue from $5.264 billion to $5.218 billion in 2019. Johnson maintains an Outperform rating on Mattel but lowered the price target from $23 to $17.

JAKKS Pacific, Inc. (NASDAQ: JAKK) is expected to be adversely impacted by Toys R Us' demise, with 2018 net revenues reduced by $20 million to $620 million. In 2019, BMO projects that net revenue will fall by $7 million to $653 million. The firm maintains a Market Perform rating on Mattel with a $2.50 price target.

Related Links:

Buy Hasbro As Toys 'R' Us Liquidates, Says KeyBanc Analyst

What The Toys 'R' Us US Liquidation Means For Toy Makers

Photo by Michael Rivera/Wikimedia. 

Latest Ratings for MAT

Nov 2018BarclaysMaintainsUnderweightUnderweight
Oct 2018CitigroupMaintainsBuyBuy
Oct 2018DA DavidsonMaintainsNeutralNeutral

View More Analyst Ratings for MAT
View the Latest Analyst Ratings

Posted-In: BMO Capital Markets Gerrick JohnsonAnalyst Color News Downgrades Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (JAKK + HAS)

View Comments and Join the Discussion!

Latest Ratings

CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Benzinga's Insider Buys Of The Week: Home Depot, Tiffany And More

Goldman Sachs: One Stock To Buy, One To Sell And One To Hold In Content Management