Mattel, Inc. (NASDAQ: MAT) is an American toy company with a global family and children’s entertainment franchise catalog. Its main segments are International, American Girl, and North America.
The company also creates film and television content, music, gaming, and live events. Following the release of the Barbie movie in the summer of 2023, the stock surged nearly 30%. However, it has since been struggling.
Mattel Earnings Report
Mattel released its latest Q3 earnings report on October 25, 2023. The company reported an EPS of $1.08 against an expectation of $0.87, a surprise of 24.14%. Its revenue was also better than expected at $1.92 billion, against an expected $1.83 billion, a surprise 5.05%.
The company also revealed that it has bought back $60 million worth of shares, bringing the year’s total to $110 million. Its earnings report also revealed that it had raised its guidance for adjusted EBITDA to $925 million-$975 million. Additionally, it had adjusted its EPS guidance to $1.15-$1.25.
The company projects free cash flow will exceed $400 million. This adjusted guidance signals that the company expects a strong performance in Q4. According to the company, most of the strong performance was due to the Barbie movie.
Mattel (MAT) Stock Performance
Following the release of Barbie in July 2023, Mattel stock surged to a 52-week high of $22.64 in the following weeks. However, the stock has since lost momentum and is currently trading at $18.74 as of November 20, 2023. Despite the drop, the stock is still up 4.75% year-to-date.
While the Q3 earnings report was mostly positive, Mattel expects net sales for the year to be comparable to 2022’s $5.44 billion. That implies the benefit from the Barbie movie has been exhausted, and it will only cast a minor glow on Q4 numbers.
Another reason for the decline is that household spending for the holiday season is expected to be depressed. That is due to macroeconomic factors that have placed pressure on household budgets.
Mattel Stock Forecast
Following the success of the Barbie movie in 2023, studios have lined up 45 toy-based movies in the coming years. That is good news for Mattel, which is one of the biggest players in the toy sector.
As movie studios make more content, it will undoubtedly have a positive knock-on effect on Mattel stock. Consequently, the price of Mattel stock could keep rising well in 2025 as toy sales climb based on publicity generated from big-budget toy stories.
Should You Buy MAT Stock
Analysts have given it a strong buy rating based on a comprehensive analysis of MAT stock. They give the stock a high price target of $27 and a low of $23. The average price target for the stock is $25, representing an upside of 33.40%.
Holding it in your portfolio could lead to huge payoffs based on this upbeat outlook for MAT stock. However, as with any financial investment, base your decisions on carefully analyzing your risk appetite.
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