An analyst from Citi on Thursday reaffirmed a Buy rating with a price target of $26.00 on Mattel Inc . (NASDAQ: NASDAQ:MAT).
The endorsement comes after Mattel successfully surpassed the financial boost it experienced from the prior year's hit Barbie movie.
The analyst highlighted that concerns about Mattel's ability to match the previous year's catalyst in FY24, especially in the third quarter, have been effectively alleviated.
Mattel's recent performance has demonstrated the company's capability to exceed the movie's success from the same quarter last year. This achievement was noted despite certain timing benefits and a conservative forecast for the fourth quarter. The company is reportedly on a solid path to significantly increase its full-year earnings compared to the previous year.
Mattel's ability to overcome the tough comparison to last year's success story with the Barbie movie, and its projection to grow earnings for the full year, reinforces the optimistic stance from Citi. The company's stock continues to be viewed favorably in light of these recent developments.
In other recent news, Mattel Inc. has been a topic of discussion due to its recent financial performance and projections. The toy manufacturer has exceeded profit expectations, mainly due to effective cost management, even as it revises its annual sales outlook downwards. A key revenue highlight was Mattel's adjusted earnings of $1.14 per share for the quarter ending September 30, surpassing the analyst estimate of 95 cents per share.
DA Davidson, a reputable financial firm, maintained a Buy rating on Mattel with a steady price target of $27.00, despite the company's sales shortfall. The firm also introduced its 2026 estimates for Mattel, rolling its valuation forward a year while maintaining the $27 price target, based on a multiple of 17 times the firm's estimated 2026 EPS of $1.60 for Mattel.
In terms of other recent developments, Mattel has increased its yearly cost savings goal to around $75 million, as part of a broader strategy to achieve $200 million in cost reductions by 2026. The company has also adjusted its gross margin forecast for the year, now expecting it to hit 50%, a rise from the previously projected range of 48.5% to 49%.
For 2024, Mattel has moderated its net sales expectations to be flat or slightly lower compared to the $5.44 billion reported last year. Despite a decrease in demand for Barbie-related merchandise following last year's "Barbie" movie, Mattel is maintaining its projected adjusted earnings per share for the year at $1.35 to $1.45.
InvestingPro Insights
Mattel's recent performance, as highlighted by the Citi analyst, is further supported by several key metrics and insights from InvestingPro. The company's financial health appears robust, with InvestingPro data showing a market capitalization of $6.04 billion and a P/E ratio of 18.01, suggesting a reasonable valuation relative to earnings.
One of the InvestingPro Tips indicates that Mattel has a perfect Piotroski Score of 9, which is a comprehensive measure of financial strength. This aligns well with the analyst's positive outlook on the company's ability to grow earnings. Additionally, the tip that management has been aggressively buying back shares could be seen as a sign of confidence in the company's future prospects.
The data also reveals that Mattel's revenue for the last twelve months as of Q2 2024 stands at $5.43 billion, with a gross profit margin of 49.56%. These figures underscore the company's solid financial performance, supporting the analyst's view on Mattel's ability to surpass previous benchmarks.
For investors seeking more in-depth analysis, InvestingPro offers 8 additional tips for Mattel, providing a comprehensive view of the company's financial position and future potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.