Interest in toys is strong as the "Black Panther" film tops the $1 billion mark. (Matt Kennedy/Marvel Studios-Disney via AP)
This weekend, blockbuster superhero movie "Black Panther" crossed the $1 billion global box office mark. The movie is even making an impact on Wall Street, where analysts say Hasbro, Inc. (Nasdaq: HAS) is likely getting its fair share of toy demand from the movie's younger fans.
According to B. Riley FBR analyst Susan Anderson, Hasbro took a gamble by rolling out a full Black Panther product line, but that gamble appears to be paying off. Anderson says "Black Panther" is just the first in a string of highly-anticipated Marvel movies that could jump-start toy sales this year, including "Avengers: Infinity War" and "Spider-Man: Into the Spider-Verse."
"While a strong box office alone does not necessarily indicate strong toy sales, 'Black Panther' should benefit from being a newly introduced character with new vehicles and gadgets," Anderson says.
At the company's analyst day in February, Hasbro management said early demand for Black Panther toys was strong. Based on Google Trends analysis, Anderson says search interest in Black Panther toys has remained elevated since the movie's premiere. Top searches include queries about action figures, masks and toy claws.
For investors, the "Black Panther" success comes at an opportune time. Hasbro stock is down 7.3 percent in the past month on persistent reports that Toys 'R' Us could choose to close its remaining stores and liquidate its assets. Anderson estimates that every additional 100 Toys 'R' Us stores that close would cut 0.5 percent from the revenue of Hasbro and competitor Mattel (MAT), but both companies have significantly scaled back their exposure from where it was in the past.
"So while a liquidation would likely cause more near-term pressure than originally expected, we believe HAS is well positioned to find homes for the inventory and its strong entertainment lineup and toy offerings coupled with its large gaming business will drive sales growth beyond the TRU bankruptcy," Anderson says.
D.A. Davidson analyst Linda Weiser also says investors should be buying Hasbro on the dip.
"We continue to be impressed with the effectiveness of HAS' Brand Blueprint strategy, based on insights, storytelling, and innovation, and its solid execution in a volatile retail environment," Weiser wrote in a note to clients last month.
B. Riley FBR has a "buy" rating and $111 price target for Hasbro. D.A. Davidson has a "buy" rating and $126 target for HAS stock.
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