Piper Jaffray Raises Price Target on Mattel (MAT) Following a Mixed 1Q
Piper Jaffray reiterated a Neutral rating on Mattel Inc. (NASDAQ: MAT), and raised the price target to $28.00 (from $26.00), following the company's mixed 1Q report. Management signaled that Q2 sales will be relatively similar to the Q1 change. This is despite a reduced comparison from Disney Princess.
Analyst Stephanie Wissink commented, "We are maintaining our Neutral rating and are rebalancing our model assuming stiff FX headwinds abate into 2H. Our underlying sales estimates are unchanged, although brand mix is shifting a bit - stronger Fisher Price, Hot Wheels, Entertainment (all lower margin) and weaker dolls, including estimates that Barbie is up only slightly in Q4 (flat in Q1; tough Q4 compare). The company will deepen its cost cuts to protect op margins, which are expected to remain flattish Y/Y. Directional commentary is creating some confusion - "flattish" implies a wide range, as was the case with adj-GM in Q1 (called "flattish;" reported down 60bps ex-FX). We expect shares to re-calibrate near-term, and visibility remains somewhat unclear on inconsistent brand trends. The baseline is indeed getting less worse, which supports our unchanged ~18x multiple. Our PT goes from $26 to $28/ sh, implying ~10% downside risk from after-market trading levels."
For an analyst ratings summary and ratings history on Mattel Inc. click here. For more ratings news on Mattel Inc. click here.
Shares of Mattel Inc. closed at $33.04 yesterday.