KeyBanc analyst downgrades Hasbro

KeyBanc analyst lowers rating on toymaker Hasbro, citing lack of new products

Associated Press

NEW YORK (AP) -- A KeyBanc analyst lowered his rating on Hasbro Inc. on Wednesday, citing the difficulties the toymaker could face in making its business grow in the year ahead.

Analyst Scott Hamann noted that Hasbro had a lack of "truly meaningful product initiatives" for 2013 in lowering his rating to "Hold" from "Buy." And while the Pawtucket, R.I.-based company is expected to gain momentum in the games and girls segments, Hamann expressed concern over the boys and preschool segments, which are expected to be relatively weaker.

By contrast, Hamann said 2014 should a better year for growth with Hasbro coming out of a modest 2013. Additionally, he noted that the company is looking at a much broader array of new products. He also noted that the company's cost savings program should have more of an impact by then.

More broadly, Hamann noted that the macroeconomic issues in key regions could put pressure on the broader toy industry.

Toymakers are facing a slowdown in developed markets such as the U.S. and Europe as mobile devices and electronics steal attention from toys. They're also more vulnerable to a weak economy because it's easier for people to cut back spending for toys than for other staples.

Hasbro, which saw its revenue decline 5 percent in 2012, said last month that it will focus on understanding and reacting to the changing marketplace moving forward.

Shares of Hasbro fell 46 cents to $41.69 in morning trading. They are still at the high end of their 52-week range of $32 to $42.28.

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