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Hasbro stock drops on BofA downgrade, slowing growth in Magic: The Gathering brand

Yahoo Finance Live examines Hasbro shares amid a stock downgrade from Bank of America analysts.

Video transcript

DAVE BRIGGS: My play is Hasbro. Shares in no mood to play around today, on track for their worst day since 2020, following a double downgrade from Bank of America. Analyst Jason Haas lowered his rating on the stock from buy to underperform, while cutting his price target from 73 to 42.

Haas says Hasbro is, quote, killing its "golden goose." He's referencing one of Hasbro's most popular trading card games, "Magic the Gathering," which Haas estimates accounts for roughly 15% of the company's revenue. Haas says they are overproducing cards, which is, quote, "destroying the long-term value of the brand."

Elsewhere in that toy sector, rival Mattel, just a few weeks ago, cut its guidance for 2022. Mattel down 1/3 in the last six months. Hasbro itself falling more than 9% today and 43% year to date. Toy stocks in bad shape ahead of the holidays, Rachelle.

RACHELLE AKUFFO: I mean, that's really an example of too much of a good thing when it came to Hasbro. Perhaps they did a little too much too-- they've diluted the brand. So a lot of people are like, it's too much. It's losing its worth. And in that same note, he said that Hasbro could fall 34% due to the company ruining the "Magic the Gathering" card game. So when you have one game responsible for that much, not a good sign. You have to be more diverse than that.

DAVE BRIGGS: 15% of revenue, and it's tough-- another softening indication of the economy.