By Paul R. La Monica

Move over, Barbie and Hot Wheels. Kids -- and probably a decent number of adults -- are now playing Magic: The Gathering and Dungeons & Dragons. That's great news for Hasbro, which owns both role-playing games, and an awful development for Mattel, the parent company of the iconic doll and toy car brands.

Hasbro and Mattel, which both reported earnings on Feb. 10, are going in different directions. Hasbro posted fourth-quarter results that topped forecasts, while Mattel's sales missed analysts' expectations. Shares of Hasbro are now up nearly 25% in 2026 and are trading at a multiyear high, while Mattel's stock tumbled almost 25% on its poor earnings. But the good times for Hasbro may not be over just yet.

Six Wall Street analysts boosted their price target on Hasbro after its earnings, according to FactSet. Eric Handler, at ROTH, was one of them, lifting his price target to $120, 17% above the current price. He noted that the popularity of role-playing games is increasing and they are no longer a niche product for a small group of hardcore players. Fourth-quarter sales for Hasbro's Wizards of the Coast and its digital-gaming unit, home to Magic, D&D, and other role-playing franchises, soared 86% from a year ago.

"The expansion of the casual player base is proving sticky," Handler wrote in a report.

Hasbro is benefiting from traditional toys, too. CEO Chris Cocks noted on the company's earnings call that the company's partnership with Walt Disney is poised for a big year thanks to the coming releases of Toy Story 5, Star Wars: The Mandalorian and Grogu, and the Marvel movies Spider-Man: Brand New Day and Avengers: Doomsday. Hasbro could also get a boost from recently announced licensing deals with HBO to make toys tied to the coming Harry Potter series as well as action figures for the live-action Voltron movie from Amazon.com's MGM Studios that is expected to stream on Prime Video later this year.

It's true investors have caught on to the fact that Hasbro is winning the toy wars. The stock is up 70% over the past year. But shares still trade for just 18 times forecasted earnings for the next 12 months, a 19% discount to the S&P 500's multiple of 22 times. According to FactSet, Hasbro has typically traded at just an 8% discount to the broader market over the past decade. So there is upside potential if that gap narrows.

Management is upbeat too. Hasbro Chief Financial Officer Gina Goetter told analysts that "supply-chain productivity nearly offset the cost of tariffs" in the fourth quarter and that tariff costs in the second half of 2026 should be relatively unchanged compared with a year ago. The company also just announced a new $1 billion stock buyback program. UBS analyst Arpine Kocharyan, who has a Buy on Hasbro, said in a report that "this will likely be viewed as a vote of confidence in [the] sustainability of earnings."

Hasbro may not have a monopoly in the toy business. But the famous board game maker might as well be one for investors. Hasbro is in much better shape than Mattel, and that should lead to more fun times ahead for the stock.

Write to Paul R. La Monica at paul.lamonica@barrons.com

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(END) Dow Jones Newswires

February 13, 2026 21:30 ET (02:30 GMT)

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