Mattel (MAT) Stock Forecast & Price Target

Mattel is projected to experience gross margin expansion of +100 basis points to 50.8% due to lower royalty expenses and decreased tariff impacts, indicating strong cost management. The toy retail market is experiencing robust growth, with a +7% year-over-year increase in 1H across G12 markets, suggesting a favorable environment for Mattel's sales. Anticipated revenue of $5.68 billion in 2026, driven by strong product offerings and strategic initiatives, further underscores the positive outlook for the company's financial performance.

Mattel's financial outlook remains negative due to a projected 20 basis point decline in operating margin to 12.2%, primarily driven by increased advertising expenses and higher employee compensation, compounded by a significant 12% drop in North American sales. The company's gross profits of $871 million fell short of the $937 million consensus expectation, resulting in an adjusted earnings per share (EPS) of $0.89, which was considerably lower than the anticipated $1.06. Additionally, Barbie revenues are expected to decline compared to 2022 levels, contributing to a substantial operating profit shortfall of $387 million against a consensus of $463 million and reflecting a 500 basis point year-on-year decrease in operating margin.