Mattel (MAT) Stock Forecast & Price Target

Mattel is projected to experience an expansion in gross margin to 50.8% in 2025, primarily due to reduced royalty expenses and lower tariff impacts. The toy industry is showing robust growth, evidenced by a 7% year-over-year increase in toy retail sales across G12 markets, which is anticipated to benefit Mattel's brands, particularly vehicles and Challenger brands with expected gross sales increases of 18% and 23%, respectively. Looking ahead to 2026, the company is forecasted to achieve revenue of $5.68 billion, representing a 5% increase, driven by a strong toy industry and strategic programs that will more than compensate for anticipated declines in some of its traditional brands.

Mattel is facing a negative outlook due to an anticipated decline in operating margins by 20 basis points to 12.2%, driven by increased advertising expenses and rising employee compensation. Revenue projections have been modestly lowered for the full year to $5.614 billion, reflecting weaker performance in key segments like Dolls, even as certain categories such as Vehicles and Challenger Brands show promise. Additionally, the adjusted gross margins dropped to 46.0%, marking a significant year-over-year decline of 480 basis points, impacted by increased promotions, tariffs, inflation, and foreign exchange effects, alongside concerns about declining retail performance and inventory issues in the US toy market.