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Investing.com - Jefferies has issued a positive outlook on Lego following the Danish toymaker’s impressive first-half results, suggesting potential upside for Hasbro (NASDAQ:HAS) and Mattel (NASDAQ:MAT). Hasbro’s stock has already shown strong momentum, gaining over 27% in the past six months and currently trading near its 52-week high of $82.19. InvestingPro data reveals 6 analysts have recently revised their earnings expectations upward for the upcoming period.
Lego reported first-half revenue growth of 12% to DKK 34.6 billion, with consumer sales up 13% and operating profit increasing 10%. The company significantly outperformed the broader toy market, particularly in Western Europe and CEEMEA regions, according to Jefferies. While Hasbro maintains impressive gross profit margins of 63.3%, analysts on InvestingPro project a return to profitability this year with a forecasted EPS of $4.84 for FY2025.
The toymaker launched a record 314 new sets in the first half across popular lines including City, Technic, Icons, Botanicals, and Star Wars. New partnerships with Bluey and One Piece, plus an upcoming 2026 Pokémon collaboration, demonstrate the value of premium licenses similar to those held by Hasbro with Disney’s Star Wars and Marvel properties.
Jefferies noted Lego’s success with adult consumers, highlighting strong sales of Botanicals sets around Valentine’s Day and Mother’s Day. This trend toward year-round adult gifting supports higher average selling prices and premiumization opportunities for both Mattel’s Icons/collector programs and Hasbro’s Wizards of the Coast and premium games.
Despite the positive read-across, Jefferies cautioned that Lego’s market share gains could create "incremental pressure in head-to-head categories" for Hasbro and Mattel, potentially affecting shelf space and promotional intensity during the second half of the year. Nevertheless, Hasbro’s financial resilience is evident in its 45-year track record of consistent dividend payments and strong liquidity position. For deeper insights into Hasbro’s competitive position and detailed financial analysis, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Hasbro has garnered attention from several investment firms following its latest financial results and strategic developments. UBS raised its price target for Hasbro to $88 from $82 while maintaining a Buy rating, citing strong second-quarter earnings and a positive outlook for the company’s gaming segment. This optimism is shared by Citi, which increased its price target to $91, highlighting the potential for a 22% return based on the strength of Hasbro’s Wizards of the Coast division. Goldman Sachs also reiterated its Buy rating with a price target of $89, emphasizing the long-term growth potential of the Magic the Gathering franchise.
Additionally, DA Davidson adjusted its price target to $80 from $75, maintaining a Neutral stance, and noted that recent trade deals have mitigated some tariff impacts on Hasbro’s financials. The firm, however, cautioned about potential cost increases in the upcoming quarter. These developments reflect a general consensus among analysts that Hasbro’s gaming portfolio is a key driver for its future growth. The company’s consumer products segment also performed better than anticipated, contributing to its overall strong quarterly performance.
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