NEW YORK, NY / ACCESSWIRE / September 7, 2017 / Mattel and Hasbro both sank into red territory on Wednesday after a rough week of negativity in the toy space. Lego announced recently that it would be cutting 1,400 jobs and BMO cut their price targets on both the companies.

RDI Initiates Coverage on:

Mattel, Inc.
https://rdinvesting.com/news/?ticker=MAT

Hasbro, Inc.
https://rdinvesting.com/news/?ticker=HAS

Mattel, Inc.'s shares closed down 3.21% yesterday on nearly 13.8 million shares. The stock sank to a new 52-week low of $15.60 during intra-day trading. It was a rocky day for toy stocks after lead analyst Gerrick Johnson of BMO was bearish about the toy industry in a note this week. BMO wrote, "The main reason for underperformance, in our view, is that there are too many movies being released and released too frequently. Aside from cannibalization, the rapid release of new movies makes each movie less relevant, less able to stand out amongst a crowded field, and limits general buzz." According to BMO, the total U.S. box office is down about 5% this year. The firm has an "outperform" rating on Mattel and lowered its price target from $25 to $23 on the stock.

Access RDI's Mattel, Inc. Research Report at:
https://rdinvesting.com/news/?ticker=MAT

Hasbro, Inc.'s shares closed down 1.95% on Wednesday on nearly 3 million shares traded. It was two days of losses for the stock after Lego announced earlier this week that it would be cutting 1,400 jobs. Lego had also announced its first sales decline in over a decade which left traders feeling weary about toy stocks. If this wasn't discouraging enough, analyst Gerrick Johnson of BMO has reduced the price target on both Hasbro and Mattel. The lead analyst has blamed "movie fatigue" for what the toy industry is suffering from.

BMO remarked, "In addition to lackluster performance at the box office, we blame an over-saturated movie market, fatigue in certain properties associated with multiple sequels, and competition from entertainment from other screens for underperformance of movie-related toys." This was the worst summer box office for Hollywood in over a decade. The firm stated, "In 2017, we believe the toy industry is experiencing movie fatigue, with toys tied to movies underperforming expectations for retailers, manufacturers, and we expect for investors, as well...With a heavy slate of toyetic movies to be released in the balance of 2017 and through 2018, we see risk to investor expectations and toy company EPS estimates over the near to intermediate term." The firm also stated, "In this note we are reducing our growth estimate for the U.S. toy industry to 2% from 3% in 2017 and to 1.5% from 2% in 2018. We are also reducing EPS expectations for Hasbro, Mattel, and JAKKS Pacific (JAKK), while leaving our estimates unchanged for Spin Master. We are also lowering our target price for Hasbro to $90 (from $95) owing to EPS reductions and further risk to earnings owing to exposure to underperforming merchandise programs tied to movies."

Access RDI's Hasbro, Inc. Research Report at:
https://rdinvesting.com/news/?ticker=HAS

Our Actionable Research on Mattel, Inc. (NASDAQ: MAT) and Hasbro, Inc. (NASDAQ: HAS) can be downloaded free of charge at Research Driven Investing.

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