雅虎香港財經 Here's Why You Should Retain Mattel (MAT) Stock for Now
Mattel, Inc. MAT is likely to benefit from an IP-driven toy business, entertainment offerings and digital initiatives. Also, the emphasis on the Optimizing for Profitable Growth program bodes well. However, an uncertain macroeconomic environment is a concern.
Let us discuss the factors that highlight why investors should retain the stock for the time being.
Factors Likely to Drive Growth
Mattel is actively pursuing its strategy to expand its IP-driven toy business and entertainment offerings to drive growth. The company expects to benefit from continued innovation across its toy portfolio and market share gains and from significant progress on entertainment projects following the success of the Barbie movie.
During the first quarter, Barbie maintained its position as the number one doll property globally, with significant market share gains (per Circana). During the quarter, the company introduced innovations, including the Mini BarbieLand segment. For Hot Wheels, the company expanded its line with new products for Racerverse, RC and Skate. The company intends to launch a new wood segment for Fisher-Price.
During first-quarter 2024, the company made progress on capturing the full value of its IP in its business verticals outside the toy aisle. MAT announced new films in the development phase with more new upcoming content. This includes adaptations of American Girl, Barney, Hot Wheels, Bob the Builder, Magic 8 Ball, Major Matt Mason, Masters of the Universe, Matchbox, Polly Pocket, Rock 'Em Sock 'Em Robots, Thomas & Friends, UNO, View-Master and Wishbone.
The company has been undertaking efforts on the digital front and focusing on better execution of marketing and promotional initiatives. MAT formed a brand development framework to unlock the scale and profitability of its brands and modernize them for the digital world. During the first quarter, the company announced a new licensing partnership with Take-Two Interactive to publish a new Barbie mobile game (slated for release later this year). In the realm of location-based entertainment, Mattel revealed plans for a second Mattel Adventure Park, in collaboration with Epic Resort Destinations, set to open in Kansas City in 2026.
Mattel is also focused on cost-saving efforts to boost the bottom line. It introduced the Optimizing for Profitable Growth Program, aiming for $200 million in annualized savings between 2024 and 2026. For 2024, the company targets $60 million in cost savings under this program. During first-quarter 2024, the program contributed to an 830 basis point year-over-year increase in adjusted gross margin, among other positive metrics. These cost-saving initiatives are designed to identify and capitalize on efficiencies, enhancing productivity, profitability and competitive positioning.
Concerns
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Mattel’s shares have declined 4.8% in the past year against the industry’s 9.6% growth. The downside was caused by an uncertain macroeconomic environment.
MAT faces financial market risks from fluctuations in interest and foreign currency exchange rates. The company is also vulnerable to significant increases in commodity, transportation, and labor costs, particularly if reductions in other input costs do not offset these. Disruptions in the supply of raw materials, components and finished products from vendors could affect the company’s business, financial health and operational outcomes.
Zacks Rank & Key Picks
Mattel currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector include
Strategic Education, Inc. STRA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
STRA has a trailing four-quarter earnings surprise of 36.2%, on average. The stock has surged 46.4% in the past year. The Zacks Consensus Estimate for STRA’s 2024 sales and earnings per share (EPS) indicates an increase of 6.4% and 33.3%, respectively, from year-ago levels.
Royal Caribbean Cruises Ltd. RCL currently sports a Zacks Rank of 1. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 65.2% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.8% and 63.7%, respectively, from year-ago levels.
Hasbro, Inc. HAS presently flaunts a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 17.5%, on average. The stock has gained 14.5% in the year-to-date period.
The Zacks Consensus Estimate for HAS’ 2025 sales and EPS suggests an improvement of 4% and 14%, respectively, from year-ago levels.
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Mattel, Inc. (MAT) : Free Stock Analysis Report
