Tepid Earnings Report Weighs on Hasbro Stock

Options bears are targeting the stock in droves

Digital Content Manager
Oct 18, 2022 at 11:10 AM
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Hasbro, Inc. (NASDAQ:HAS) was last seen down 2.9% at $65.83, earlier hitting a two-year low of $65.72, following the toy manufacturer's third-quarter earnings report. Hasbro reported profits of $1.42 per share, missing analysts' estimates by 10 cents, while its revenue of $1.68 billion fell in line with expectations. The company said raising its prices to protect profit margins limited customer spending as inflation continues to run rampant. 

Earlier this month, Hasbro cut its annual sales forecast, leading to a slew of bear notes from analysts. While the brokerage bunch has held its tongue today, there's still room for price adjustments and downgrades. Of the eight analysts in coverage, five say "buy" or better, while three say "hold." Meanwhile, the 12-month consensus price target of $90.92 is a 34.5% premium to current levels. 

Hasbro's options pits are telling a different story, as bears circle the toy concern. So far, 3,224 calls have exchanged hands, which is six times the intraday average and roughly three times the number of calls traded. The October 65 put is by far the most popular, followed distantly by the 75 call in the same monthly series.

This penchant for bearish bets isn't unusual, though. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HAS sports a 50-day put/call volume ratio of 2.72, which sits higher than 91% of readings from the past year. This implies long puts have rarely been more popular. 

Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 2.74 stands higher than 79% of readings from the past 12 months, implying short-term options traders are much more put-biased than usual. 

Today's drop has the stock breaking below its recent Oct. 13, two-year low of $65.83, with pressure emerging at the $69 mark. Hasbro stock has lost 35.1% year-to-date, guided lower by the 80-day moving average for the better part of 2022. 

 

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