What Happened?
Shares of toy manufacturing and entertainment company (NASDAQ: MAT) fell 3% in the morning session after Goldman Sachs downgraded the stock from "Buy" to "Neutral," citing worries about the company's growth prospects and the broader economic environment for the toy industry.
The investment bank noted the stock's recent strong performance and adopted a more balanced view on its risk versus reward. Goldman Sachs expressed caution about the toy market in 2026, pointing to potential headwinds from tariffs, price increases, and retailer sentiment. These factors were described as challenges to Mattel's ability to grow sales and improve profit margins. The downgrade also came as the company had previously faced difficulties with its revenue growth and profitability. Goldman set a price target of $21.00 per share.
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What Is The Market Telling Us
Mattel’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 16.5% on the news that the company reported fourth-quarter results that significantly exceeded analysts' EPS and EBITDA expectations. Revenue also exceeded expectations, though by a narrow margin, as sales increased 1.6% year-on-year. Additionally, its revenue and full-year EPS guidance outperformed Wall Street estimates. Zooming out, we think this was a good quarter with some key areas of upside.
Mattel is up 7% since the beginning of the year, and at $21.45 per share, it is trading close to its 52-week high of $22.16 from January 2026. Investors who bought $1,000 worth of Mattel’s shares 5 years ago would now be looking at an investment worth $1,164.
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