Hasbro (HAS) is expected to increase its 2025 outlook due to the China tariff relief since last quarter, which hints at a "better" H2, Morgan Stanley said in a Wednesday note.

The company is anticipated to raise its earnings before interest, taxes, depreciation and amortization outlook by about $50 million, the note said.

There is "robust" demand for the company's Magic: The Gathering's Final Fantasy set and thus Hasbro is expected to raise its 2025 outlook flowing through anticipated Q2 upside, the note said.

Additionally, Morgan Stanley said that the toy and family entertainment company Mattel (MAT) is expected to report Q2 sales of $1.03 billion, down 5% from a year earlier.

In Q1, Mattel paused its full-year guidance due to the uncertain macro environment because of US tariffs as the management sought further clarity on the consumer demand and macro environment, the note said.

"We don't have a strong view one way or the other, though regardless of whether formal guidance is re-instated or not, we don't see significant downward revision risk to consensus estimates", according to the note.

Morgan Stanley raised Hasbro's price target to $83 from $77 and maintained an overweight rating, while raising Mattel's price target to $21 from $17 and kept its rating unchanged at equalweight.

Hasbro's stock rose 1% in recent Thursday trading, while Mattel's stock declined slightly.

Price: 76.68, Change: +0.76, Percent Change: +1.00