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On Tuesday, UBS analyst Arpine Kocharyan reiterated a Buy rating and a $29.00 price target on Mattel Inc . (NASDAQ: NASDAQ:MAT) shares, representing a 73% upside from the current price of $16.74. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $17 to $30. Kocharyan highlighted Mattel’s recent performance, noting the toy manufacturer’s quarter results surpassed expectations in terms of revenue and profit margins. The company maintains healthy fundamentals with a robust gross profit margin of 50.9% and strong liquidity, as indicated by a current ratio of 2.38. Kocharyan’s analysis indicated a positive trend in retail sales moving into the second quarter, even after adjusting for the shift in Easter timing, which was estimated to affect demand by approximately 2-3 percentage points.
Despite Mattel pausing its financial guidance for the fiscal year 2025, the company conveyed an optimistic outlook on its ability to manage the full impact of tariffs that year. According to the analyst, Mattel did not experience any tariff-related impact in the first quarter, and the second quarter would also remain unaffected due to existing inventory. However, starting in the third quarter, Mattel anticipates tariff costs to be around $270 million, potentially affecting earnings per share (EPS) by approximately $0.62.
Kocharyan’s estimates suggest that the annualized impact of tariffs could reach between $350 million to $400 million. Nevertheless, Mattel has expressed confidence in its mitigation strategies, which are expected to neutralize the tariff impact in the second half of the year and proportionally cover the annualized effect on a full-year basis. This proactive approach by Mattel has been factored into UBS’s continued positive rating and price target for the company’s stock.
In other recent news, Mattel Inc. reported its first-quarter 2025 earnings, which outperformed Wall Street projections. The company achieved an adjusted earnings per share (EPS) of -$0.05, surpassing the anticipated -$0.09, and recorded revenue of $827 million, exceeding the forecasted $786.01 million. Additionally, Mattel repurchased $160 million in shares during the quarter. Analysts at Citi have shown confidence in Mattel by raising the stock price target to $22, maintaining a Buy rating, following the company’s strong quarterly performance. Meanwhile, Morgan Stanley (NYSE:MS) increased its price target to $17, maintaining an Equalweight rating, citing Mattel’s ability to manage costs despite pausing its full-year guidance due to economic uncertainties. The company expressed its capability to counterbalance additional tariff-related expenses and is implementing strategies to diversify its manufacturing base beyond China. These developments highlight Mattel’s strategic actions to navigate challenges and capitalize on growth opportunities.
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