Analyst: Don't Buy the Hype on Mattel Stock

MAT is vulnerable to downgrades that could weigh on the stock

Deputy Editor
Feb 5, 2024 at 9:04 AM
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Mattel Inc (NASDAQ:MAT) stock is 1.7% lower premarket, after J.P. Morgan Securities downgraded the toymaker to "neutral" from "overweight." According to the analyst, the toymaker's tailwinds from the "Barbie" movie were overblown, while weak 2023 holiday sales and higher freight costs will weigh on MAT going forward.

Despite a fractional year-to-date lead and a nearly 11% year-over-year deficit, the majority of analysts are optimistic; eight of the 11 in coverage call Mattel stock a "strong buy." Plus, the 12-month consensus price target of $22.55 is an 18.6% premium to Friday's close. All of this leaves the equity open to more downgrades and/or price-target cuts going forward.

Since a July 27 annual high of $22.64, the shares have carved out a channel of lower lows. Now, MAT is set to erase some of Friday's 4.1% gain -- its best single-session performance since November 2023. What's more, Mattel stock is on track to breach its year-to-date breakeven mark, and open below recently reclaimed support at its 40-day moving average -- a historically significant trendline. 



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