Mattel (MAT) Stock Forecast & Price Target

Mattel's financial outlook is strengthened by an anticipated gross margin expansion of 100 basis points to 50.8%, driven by lower royalty expenses and reduced tariff impacts. Additionally, the toy retail market has shown resilience, with a year-over-year growth of 7% in the first half across G12 markets, indicating robust demand that complements Mattel's product offerings. Lastly, growth in key categories such as action figures, games, and building sets is projected to contribute to an estimated sales increase in 4Q25, with significant upgrades to both operating profit and earnings per share, further solidifying a positive business trajectory for Mattel.

Mattel's financial outlook is negatively impacted by a projected decline in operating margin, expected to fall by 20 basis points to 12.2%, primarily due to increased advertising expenses and higher employee compensation, compounded by a notable 12% decrease in North American sales. Gross profits of $871 million fell short of consensus estimates of $937 million, with adjusted EPS reported at $0.89, significantly below the consensus of $1.06, highlighting challenges in revenue generation amidst rising costs. Furthermore, operating profits reached only $387 million, well below the expected $463 million, with Barbie revenues anticipated to be lower than in 2022, signaling ongoing difficulties within key product lines.