Goldman lowers Mattel rating to Sell on macro and execution risks; shares dip

Investing.com -- Goldman Sachs downgraded Mattel to Sell from Neutral and cut its price target to $12 from $9 as execution risks mount heading into the second half of 2026, sending its shares sliding 1.7% in premarket trading Thursday.

The $12 target, based on 8x 2027 estimated earnings per share — reduced from a prior multiple of 10.0x — stands in contrast to the approximately 10% upside Goldman Sachs sees on average across its broader Entertainment coverage.

The bank’s multiple compression reflects “a mark-to-market to other low-growth consumer products companies,” a peer group that carries notably less optimistic valuation assumptions than Mattel had previously commanded.

Analysts led by Stephen Laszczyk see Mattel as "an execution story with a higher than average degree of operational complexity" over the next six to 12 months.

They cited three challenges the toymaker faces, including navigating a volatile geopolitical, macro and consumer backdrop; combating competitive pressure within the toy industry; and executing on newer investment initiatives in trading cards, collectibles and video games.

Goldman said it expects Mattel shares to trade "range-bound to lower," with downside risk to both estimates and valuation until the company delivers more consistent results across its core toy business and newer growth areas.

The analysts specifically flagged muted performance around the Masters of the Universe content release and its accompanying app-based video game as evidence of reduced visibility into the company’s return on investment.

The franchise had been positioned as one of Mattel’s flagship bets on translating intellectual property into multi-platform revenue, and its underwhelming traction has raised questions about the scalability of that model.

Factors that analysts said would turn them more positive on the stock are a successful repositioning of the Barbie brand that returns it to consistent growth; proof points validating Mattel’s new strategic investments and portfolio evolution; and stronger-than-expected top-line support from the company’s toy-related content slate.

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