Mattel (MAT) Stock Forecast & Price Target

Mattel is projected to see a significant expansion in gross margin, increasing by 100 basis points to 50.8%, supported by reduced royalty expenses and lower tariff impacts. The toy retail sector has experienced an overall growth of 7% year-over-year across G12 markets, suggesting a favorable environment for Mattel's products, with specific segments like vehicles and Challenger brands expected to witness gross sales growth of 18% and 23%, respectively. Furthermore, Mattel anticipates revenue growth of 5% in 2026, driven by strong new product offerings and improved operating margins, projected to rise 360 basis points to 13.4%, highlighting effective management of both sales growth and operating expenses.

Mattel is projected to experience a decline in operating margin, with an expected decrease of 20 basis points to 12.2%, primarily due to increased advertising expenditure and higher labor costs. Revenue expectations have been modestly reduced from $5.664 billion to $5.614 billion, reflecting stronger projections in certain product lines being overshadowed by declining demand for Dolls and ITPS, with Barbie revenues notably lower compared to the prior year. Additionally, the company's adjusted gross margins declined 480 basis points year-over-year, influenced by promotional increases, tariffs, inflation, and foreign exchange effects, alongside an anticipated decline in U.S. toy industry retail sales, which may further strain Mattel's financial performance.