Mattel's Near Term Outlook Looks Attractive Amid Toy Industry Challenges: Analyst

D.A. Davidson analyst Linda Bolton Weiser reiterated a Buy rating on the shares of Mattel Inc MAT with a price target of $25.

The toy industry is highly competitive with low barriers to entry. This makes it difficult for the company to achieve, maintain, or build upon its successful brands and products in addition to securing, maintaining, and renewing licenses for popular entertainment products, adds the analyst.

According to the analyst, Mattel's operating performance relies heavily on sales during the brief holiday season and any disruptions to the company's results during this time could negatively impact the company's sales.

Consumer interests in the toy industry are rapidly changing which makes it difficult to design toys that will be popular with children and families, the analyst opines.

However, the analyst says Mattel has the rosiest near-term outlook and estimates 4Q23E sales growth to be more than 20% Y/Y. 

The $25 price target is based on 17x 2025E EPS of $1.48.

In October, Mattel raised its FY23 adjusted EPS guidance to $1.15 - $1.25.

Also Read: American Girl Dolls Leap To Big Screen In Mattel, Temple Hill & Paramount's Latest Film Venture

Price Action: MAT shares are trading lower by 0.26% at $19.05 on the last check Wednesday.

Photo via Company