DCF Studio

    HAS · NMS · Consumer Cyclical

    Hasbro, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 39.46

    Market price

    USD 87.57

    Implied upside

    -54.9%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 39.46-54.9%
    Exit multiple
    USD 45.54-48.0%
    Market price
    USD 87.57

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m366m731mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 4.4bnUSD 4.1bnUSD 3.8bnUSD 3.5bnUSD 3.3bn-7.1%
    EBITUSD 559.9mUSD 520.3mUSD 483.6mUSD 449.4mUSD 417.7m-7.1%
    NOPATUSD 442.3mUSD 411.1mUSD 382.0mUSD 355.1mUSD 330.0m-7.1%
    Add depreciation & amortisationUSD 386.9mUSD 359.5mUSD 334.1mUSD 310.5mUSD 288.6m-7.1%
    Less capital expenditureUSD -176.4mUSD -164.0mUSD -152.4mUSD -141.6mUSD -131.6m-7.1%
    Less increase in working capitalUSD 78.4mUSD 72.9mUSD 67.8mUSD 63.0mUSD 58.5m+7.1%
    Free cashflow to firmUSD 731.2mUSD 679.6mUSD 631.6mUSD 586.9mUSD 545.5m-7.1%
    Discount factor0.96420.89640.83330.77470.7202-
    Present valueUSD 705.0mUSD 609.1mUSD 526.3mUSD 454.7mUSD 392.9m-13.6%
    Present Value Of The ForecastUSD 2.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.642Reported 0.466, pulled toward 1.0 (Blume)
    Cost of equity8.53%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 12.4bn78.9% of capital
    Total debtUSD 3.3bn21.1% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.57%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 39.46

    66% of EV

    Forecast FCFF, final year
    USD 545.5m
    Capex at depreciation, working capital in reinvestment
    USD 503.3m
    Less reinvestment at g/ROIC (28.3% of NOPAT)
    USD -142.5m
    Capitalised
    USD 360.8m
    ROIC (reported)
    8.8%
    Terminal value, undiscounted
    USD 7.3bn
    Terminal value, discounted
    USD 5.3bn
    Enterprise value
    USD 7.9bn
    Less net debt
    USD 2.4bn
    Equity value
    USD 5.5bn

    Exit at 12.0x EBITDA

    Value per shareUSD 45.54

    69% of EV

    Terminal value, undiscounted
    USD 8.5bn
    Terminal value, discounted
    USD 6.1bn
    Enterprise value
    USD 8.8bn
    Less net debt
    USD 2.4bn
    Equity value
    USD 6.4bn

    Spread between methods: 14%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.57%61.0865.0370.2177.3587.87
    6.57%47.2148.9651.0953.7957.31
    7.57%37.8738.6139.4640.4741.68
    8.57%31.1431.3731.6131.8732.15
    9.57%26.4526.5726.7026.8226.95

    Outlined: this model. Green text: above today's price of 87.57. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-7.1%8.5%+15.6pp
    EBIT margin12.8%29.9%+17.0pp
    Discount rate7.6%5.0%-2.6pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.