Mattel, Inc. (MAT) has been upgraded to a "Buy" by Citi, maintaining a price target of $26, following a strong Q4 2024 performance and optimistic FY25 guidance. The company reported a Q4 adjusted EPS of $0.35, significantly surpassing the consensus estimate of $0.19, driven by a robust adjusted gross margin of 50.8%, up 200 basis points y/y. Net sales rose 2% y/y to $1.646 billion, slightly above expectations, with growth in vehicles, action figures, and games offsetting declines in dolls and infant categories.
Citi highlights Mattel's strategic cost structure optimization and early signs of a turnaround, noting, "MAT is showing early green shoots of a turnaround with the rightsizing of the cost structure and the beginnings of topline growth." The FY25 adjusted EPS guidance of $1.66-$1.72 exceeds the Street's estimate of $1.56, reflecting anticipated tariff impacts and $600 million in planned share repurchases.
Mattel's strategic initiatives include diversifying its supply chain and expanding digital entertainment offerings, with several films and TV shows in development. The company expects continued growth in key brands like Hot Wheels and UNO, supported by new product launches and partnerships.
As of February 5, 2025, Mattel's stock price is $20.49, reflecting a 13.39% increase from the previous close.