The stock has seen volatile post-earnings moves in the past
The toy manufacturer’s shares Hasbro, Inc. (NASDAQ: HAS) have made valiant efforts to regain their post-pandemic levels and staged a tough rally from their March 2020 spiral with solid support from multiple moving averages, including the 100-day period that has seen multiple retreats since June. The stock appears to have hit a wall in 2021, however, with pressures emerging near the $ 100 level as a cap in mid-January. Although earnings season is just around the corner and another quarterly report from HAS will be released ahead of the opening on Tuesday April 27, the mid-sized HAS could be ready to take another big step.
Traders should consider the history of stocks with dramatic post-earnings volatility before delving into HAS before their quarterly report. During the company’s final eight meetings the next day, Hasbro stock only posted positive returns twice in 2019, though one of those meetings ended with a pop of 14.2%. On the other hand, Hasbro shares also suffered a 16.8% decline after their October 2019 report. This time around, the option pits are calculating a 9.3% move for HAS, slightly larger than the 8.3% move the stock averaged from its last eight reports, regardless of direction.
Despite this past volatility, options traders are currently calculating relatively low volatility expectations. This corresponds to the Schaeffer volatility index (SVI) of HAS of 37%, which is higher than only 27% of the measured values of the last 12 months. In other words, options are cheap right now.
Those who have already speculated with options about the next move in Hasbro stock are leaning towards puts. In fact, on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX), HAS has a put / call volume ratio of 1.23 for 10 days, which is in the 84th percentile of the year Range. This means that long puts will exceed the number of calls and will be much faster than usual.
The analysts were a little more optimistic. Of the 10 HAS covers, six say “strong buy” and four say “hold”. Additionally, the 12 month consensus price target of $ 107.86 is a 9.5% premium over current levels.