Mattel (MAT) Stock Forecast & Price Target

Mattel is projected to see a gross margin expansion to 50.8% due to lower royalty expenses and tariff impacts, which positions the company favorably in terms of profitability. The toy retail market has shown robust growth, increasing by 7% year-over-year across G12 markets, signaling healthy consumer demand that is likely to benefit Mattel's sales going forward. Furthermore, anticipated revenue growth of 8% in 2026, driven by compelling new product offerings, reinforces a positive outlook for Mattel's financial performance.

The negative outlook on Mattel's stock is supported by several concerning financial metrics, with a 12% decline in North American sales significantly impacting revenue generation. The company's gross profits totaled $871 million, falling short of the consensus estimate of $937 million and reflecting a troubling trend in adjusted EPS, which came in at $0.89 compared to the expected $1.06. Additionally, operating profits dropped to $387 million, representing a 22.3% operating margin that decreased by 500 basis points year-over-year, further exacerbated by unanticipated costs related to advertising and increased employee compensation.