Magic: The Gathering card game will lead to even more gains for this toymaker, Goldman says

3 days ago

The strength of Hasbro's gaming portfolio is being overlooked by investors, according to Goldman Sachs. Analyst Stephen Laszczyk upgraded shares of the toymaker to buy from neutral and lifted his 12-month price target by $19 to $85. That suggests the stock could jump about 15.1% from Monday's close. "We believe Hasbro is well-positioned to exceed consensus expectations in 2026+ across revenue, adjusted EBITDA, and free cash flow," Laszczyk wrote in a Monday note to clients. He added that his 17.5x target price-to-earnings multiple is in line with where other scaled video game and digital media companies trade. The analyst's pointed to three factors driving his upgrade and price target hike: Magic: The Gathering's new Universes Beyond sets, which include card designs from Fortnite, Dungeons & Dragons and Marvel properties The company's self-published digital gaming strategy "Better-than-feared" performance from the toy business as tariff relief, market share growth and pricing insulate profitability HAS 1Y line Hasbro stock performance over the past year. Key to Laszczyk's investment thesis for Hasbro are his growth expectations for Wizards of the Coast (WOTC), which he expects to contribute the majority of Hasbro's EBITDA going forward as the company leans into digital gaming. He forecasts WOTC's revenue will see roughly 7% compound annual growth over the next five years — from $1.755 billion in 2025 to $2.454 billion in 2030. "We believe that long-term execution opportunities in the WOTC segment are underappreciated by the market, while near-term macro risks to profitability in the Consumer Products segment are overstated (as discussed within)," Laszczyk said. "As a result, we believe that shares currently offer investors an attractive risk-reward skew with a robust catalyst path over the next ~12 months." Laszczyk sees upside overall being driven by Hasbro's self-publishing games business, which he believes can contribute between $150 million and $300 million in revenue per game, or roughly $450 million annually, over the next 5 years. According to the analyst, Magic the Gathering will be Hasbro's first $1 billion brand driven by higher player volume, spend per player and increased app engagement. Hasbro is also a durable play compared to its peers, according to Laszczyk. "Hasbro benefits from a portfolio of strong IP (e.g., Transformers, Marvel, Monopoly, Magic The Gathering) and from one of the most flexible & strongest supply chains in the toy industry," he said. "Given these characteristics, we see Hasbro's significant scale as a key factor insulating the company from broader weakness in industry supply/demand." Hasbro shares rose nearly 2% in the premarket. Shares have been on fire this year, soaring 32% in that time.

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Despite all the drama, trade uncertainty hasn't really hurt economic growth, Goldman Sachs says

Business Insider

2 hours ago

Business Insider

Despite all the drama, trade uncertainty hasn't really hurt economic growth, Goldman Sachs says

President Donald Trump's new policies may be upending the global trade order, but so far, they're not hitting the economy hard, wrote Goldman Sachs analysts. "There are very few signs that uncertainty is taking a toll on activity," analysts at Goldman Sachs wrote in a Thursday note. Even though the analysts had expected Trump's second term to slow economic activity, the numbers tell a different story. Since late 2024, investment, factory hiring, consumer spending, and broader economic activity have all stayed resilient across major developed and emerging markets. In fact, growth forecasts for both the second quarter and this full year have actually improved from earlier, more pessimistic calls. The analysts pointed out that in most economies, trade-exposed investment accounts for a small share of GDP, so the impact may just be "too small to see." New factory investment, especially in emerging markets, has dipped, but this accounts for just 0.2 to 0.3 percentage points of GDP in major economies. The analysts also wrote that uncertainty usually bites hardest when financial conditions tighten. But global liquidity has actually improved since the start of the year, making it easier for businesses to borrow money and invest. Meanwhile, activity and investment expectations that dipped in April — which coincided with Trump's "Liberation Day" announcement — have already bounced back on improved tariff news. "As such, while we continue to expect that tariffs will slow activity later this year, we expect this will be mostly driven by the direct impacts of tariffs rather than uncertainty around trade policy," they added. Goldman's report came as the US posted better-than-expected employment data in June. The economy added 147,000 jobs, and unemployment fell from 4.2% to 4.1%. Investor sentiment is upbeat, with the S&P 500 and the Nasdaq at record highs. To be sure, trade policy uncertainty remains high by historical standards, with Goldman's uncertainty index spiking after Trump's election. But that uncertainty has eased in recent months as Trump negotiates new trade deals. Some businesses did rush to ship goods to the US ahead of potential tariffs, a phenomenon known as "front-loading," which may have helped mask some issues. But even after controlling for that, Goldman analysts found little evidence of an "uncertainty drag" on growth. There were also few differences between economic activities in countries that did and didn't boost exports to the US this spring. "The uncertainty drag, therefore, appears smaller than feared," they wrote.

Goldman Lowers Treasury Yield Forecasts on Rising Fed Cut Bet

Bloomberg

5 hours ago

Bloomberg

Goldman Lowers Treasury Yield Forecasts on Rising Fed Cut Bet

Goldman Sachs Group Inc. has lowered its forecasts for US Treasury yields, pointing to the increased likelihood that the Federal Reserve will cut interest rates sooner than previously expected. Strategists including George Cole wrote in a July 3 report that they expect two- and 10-year yields to end the year at 3.45% and 4.20%, respectively, part of a lowering of yield forecasts at every major maturity. They had previously expected those benchmark yields to finish the year at 3.85% and 4.50%.

Goldman Rises to Top in Hong Kong Equity Deals as Market Booms

Bloomberg

8 hours ago

Bloomberg

Goldman Rises to Top in Hong Kong Equity Deals as Market Booms

Goldman Sachs Group Inc. claimed top ranking in Hong Kong equity sales for the first time since 2013, riding a wave of billion-dollar deals in the city after three years of lackluster activity. So far this year, Goldman is given credit for $5.6 billion in initial and secondary offerings, beating runner-up UBS Group AG by $2 billion, helped by four mega deals, data compiled by Bloomberg showed. Back in 2022, the Wall Street giant ranked as low as 13th in the closely watched league tables.