Roth MKM lowered Mattel (NASDAQ:MAT) to Neutral from Buy in a note Thursday, reducing its price target for the stock to $20 from $24 per share.
Analysts at the firm said they are downgrading shares of the company based on its lower and more cautious 2024 growth outlook. Mattel shares fell over 2% in early Thursday trading.
"In our view, Mattel finished 2023 with excess inventory on retail shelves, which will once again weigh on 1H results (although to a lesser extent than 2023)," the firm wrote.
"In addition, with Barbie facing challenging comparisons and seemingly lacking meaningful growth catalysts, we are lowering our 2024 estimates and believe consensus expectations for the year are too high," they added.
Analysts at Roth MKM also said it was very clear from their in-store checks around the holiday season that Mattel had gained shelf space and inventory levels were relatively high as Christmas neared.
"Our research suggests retail inventories for certain brands at the end of the quarter were elevated and will likely need time to work through during the early portion of 2024," said the firm.