Hasbro has relaunched its iconic EASY-BAKE and PLAYSKOOL brands with exclusive Walmart rights, igniting a significant debate among investors regarding the company's true valuation despite recent stock gains. Divergent analyses present vastly different outlooks for the toy and entertainment giant.

U.S. equities markets are closely watching Hasbro (HAS) as the toy and entertainment giant navigates a period of strategic brand revitalization, highlighted by the exclusive relaunch of its EASY-BAKE and PLAYSKOOL lines with Walmart (WMT). This move, while signaling a renewed focus on core brands, has intensified an already active debate among investors concerning the company's valuation, presenting highly contrasting outlooks for its future.

Brand Revitalization and Strategic Focus

Hasbro, in collaboration with Just Play, recently introduced modernized versions of its classic EASY-BAKE and PLAYSKOOL toy brands, now available exclusively at Walmart in the United States. This partnership aims to appeal to both nostalgia-driven consumers and new parents, signifying a proactive step in brand reinvention. While viewed as a positive development for re-engaging with traditional retail channels, analysts suggest this relaunch alone is unlikely to be the primary catalyst for Hasbro's broader growth. The company's more significant growth drivers are anticipated from its digital and licensing initiatives, areas where Hasbro is strategically pushing with ventures such as tech-enabled toys like Nano-mals.

This brand effort aligns with Hasbro's overarching "Playing to Win" strategy, which projects mid-single-digit revenue growth and an annual operating profit margin improvement of 50 to 100 basis points through 2027. The company anticipates achieving $1 billion in gross cost savings by 2027. Hasbro's strategy also encompasses expanding its high-margin Wizards of the Coast segment, known for franchises like Magic: The Gathering, alongside increasing investment in self-published video games and emerging markets. The company has also moved to exit non-core businesses, such as its eOne film and TV unit, as part of its drive to optimize its balance sheet and focus on profitable growth.

Divergent Valuation Assessments

Despite Hasbro's stock advancing approximately 16% over the last three months and 23% over the past year, the market is sharply divided on its intrinsic value. One prevailing narrative paints a stark picture of overvaluation:

The most widely discussed narrative suggests Hasbro's current valuation is vastly overvalued, with a fair value estimated at $1.90, implying an overvaluation of over 4000%.

This pessimistic view is often attributed to forecasts predicting dramatic changes in forward earnings and a radical recalibration of future profit margins, stemming from a belief that many of Hasbro's brands are not generating profit due to past business decisions. For the last twelve months, Hasbro reported a net loss of $568.30 million on revenues of $4.25 billion, resulting in a loss per share of $4.07.

Conversely, several Discounted Cash Flow (DCF) models offer a significantly more optimistic assessment. For instance, Simply Wall St's DCF model suggests that Hasbro shares may currently be trading below their estimated fair value, indicating potential undervaluation. Other analyses employing DCF models estimate Hasbro to be undervalued by 2%, or trading close to its fair value at a 12% discount to its current share price. The Moomoo DCF model estimates Hasbro's fair value at approximately US$87.12, which aligns closely with analyst price targets.

Key financial metrics supporting the more optimistic valuations include an average analyst 12-month price target of US$88.33 and projected analyst EPS estimates of $4.84 for 2025 and $5.16 for 2026. The current share price as of September 9, 2025, was approximately US$78.64.

Market Implications and Investor Scrutiny

This pronounced divergence in valuation perspectives highlights the subjective nature of equity analysis and the profound impact of underlying assumptions on perceived value. For the broader Consumer Brands and Toy Market sectors, such extreme discrepancies in a major player like Hasbro underscore an environment of high uncertainty and potential volatility. It compels investors to meticulously scrutinize the specific assumptions underpinning any valuation claim rather than relying solely on headline figures. While Hasbro's current market capitalization stands at $10.89 billion with an enterprise value of $13.69 billion, its balance sheet shows $546.60 million in cash and $3.35 billion in total debt, with a Return on Equity (ROE) of -77.42% and Return on Invested Capital (ROIC) of 11.97%.

Looking Ahead

Investors will be closely monitoring the execution of Hasbro's "Playing to Win" strategy and the tangible financial outcomes of its brand revitalization efforts. The ability of Hasbro to successfully pivot towards digital and licensing-led growth, while mitigating the ongoing weakness in traditional consumer products, will be crucial in resolving the current valuation debate. Future earnings reports and updated guidance on revenue and profitability projections for 2028, which anticipate $4.9 billion in revenue and $773.5 million in earnings, will provide critical insights into whether the company can bridge the gap between the divergent market narratives and solidify a consensus on its long-term value.