Barclays Downgrades Hasbro Despite Anticipation For 'Star Wars: The Force Awakens'

Barclays downgraded Hasbro, Inc. (NASDAQ: HAS) Friday from Overweight to Equal-Weight. The firm also raised its price target from $57 to $62.

Analyst Felicia R. Hendrix decided to return “to the sidelines” following the 25 percent gain in the company’s shares since August.

Hendrix noted that the stock was “fully valued on historical measures” and that “bulls will overlook current P/E multiples and headwinds in favor of potential multiple expansion and stock price increase into major entertainment-related events later this year and 2016.”

The analyst felt that trading into an event was compelling, however, the risk-to-reward ratio in this situation was not favorable. Adverse currency fluctuations, difficult comps as well as elevated expectations “pose risks to both consensus estimates and valuations” which could “limit near term stock price appreciation.”

The biggest event ahead was the highly anticipated release of "Star Wars: Episode VII The Force Awakens" in December. While bulls viewed this as an event that could drive the stock higher, Hendrix felt that based on the stock’s valuation, any short-term gains could be quickly reversed.

Despite the headwinds, Hendrix was still impressed with the company’s “ability to connect with consumers through innovation, story-telling and leading brands.”

Hasbro recently traded at $60.96, down 1.3 percent.

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