Hasbro Stock Faces Downgrade in Wake of Layoffs
Financial analysts have downgraded Wizards of the Coast’s parent company in the wake of a declining toy market and massive layoffs.
If 2021 taught us anything, it’s that the world of “finance” is as weird and unpredictable as any roleplaying game. Perhaps even more so when you consider that it was video game retailer GameStop that kicked off many people wondering “What even is a stonk?”
Try as we might to ignore it, the world of finance creeps its way into everything with its Midas-like touch turning all into value—including D&D. Today, WotC’s parent company Hasbro faces a significant downgrade from financial analysts at DA Davidson.
Hasbro Faces Downgrade in 2024
Yesterday analysts at DA Davidson downgraded Hasbro stock from “buy” to “neutral”, according to reporting from FinViz. Citing a struggling toy market, Davidson remains wary of Hasbro’s 2024, as their research note indicates:
“We estimate 2023 could be the second year that free cash flow does not cover dividends of ~$400M.”
2023 wasn’t a hot year for Hasbro stocks. Last year, Bank of America downgraded Hasbro’s stock performance, again rating it “neutral”, as did Goldman Sachs back in February in the days after WotC’s OGL dust storm began to settle.
A number of factors play into this. Most industries are facing “post-COVID corrections”. In other words, the explosive growth many industries experienced wasn’t guaranteed or sustainable—who would’ve known? But as per Hasbro’s own statements following the announcement that it would be firing 1,100 employees starting in December 2023, the biggest problem has been toys.
Wizards of the Coast has been consistently profitable. Though 2024 may prove to be a challenge because Baldur’s Gate 3 won’t come out again in 2024. But it is also the 50th anniversary of D&D, and Magic: The Gathering has many promising sets in store.
As Hasbro and WotC head into the fiscal new year, it’s plain to see challenges on the horizon.
