Moody's Investors Service upgraded its outlook on Hasbro, Inc. from stable to positive on 27 August 2026. The agency affirmed the company's Baa2 senior unsecured notes rating and its Prime‑2 commercial paper rating while highlighting a projected 5% revenue increase over the next 12‑18 months.
Moody's expects Hasbro's net debt to decline to roughly 2.25 times EBITDA by the end of 2026, down from a baseline of 2.5 times recorded on 28 June 2026. The rating agency cited the company's commitment to maintain a gross debt‑to‑EBITDA ratio of 2.5x or better as a key factor. The outlook shift also reflects Moody's criteria that debt‑to‑EBITDA stay below 2.5x and EBITA‑to‑interest expense remain above 6.0x.
The positive outlook is driven by strong performance in the Wizards of the Coast and Digital Gaming segment, which benefits from recurring tabletop engagement, digital expansion and licensing income. The consumer products division returned to revenue growth in the second quarter of 2026 despite tariff pressures and cybersecurity disruptions.
Moody's identified several strengths, including Hasbro's leading positions across toy and game categories, broad geographic reach, well‑known franchises such as Magic: The Gathering and Dungeons & Dragons, a historically conservative capital structure and ample liquidity. Risks noted comprise seasonal volatility in the toy market, fashion risk, shifting play patterns and weaker profitability in traditional toys.
Potential downgrade triggers listed by Moody's include material declines in revenue or EBITA margin, deteriorating liquidity, negative free‑cash‑flow generation or shareholder distributions that signal a more aggressive financial strategy.
