Analysts Flashing a Green Light for Mattel, Inc. (MAT)?

Analysts at UBS cut their rating on shares of Mattel, Inc. (NASDAQ:MAT) from Buy to Neutral in their opinion released on June 19. Jefferies analysts bumped their recommendation on MAT stock from Underperform to Hold in a separate flash note to investors on April 11. Analysts at Jefferies downgraded the stock to a Underperform call from its previous Hold stance, in a research note that dated back to February 26.

In the latest fortnight, short interest in Mattel, Inc. (NASDAQ:MAT) stock reduced by 8.85%, indicating a significant rise in bullish sentiment. When it comes to determining how a name is viewed by investors, short interest is often a useful tool. The average analyst recommendations at 0 suggests selling these shares. Between December 14 and December 31, the total number of shorted shares amounted to 62.07 million shares. That was 6,028,969 less shares than the total of 68.1 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for MAT at the December 31st settlement jumped to 6,747,073, as compared to 4,970,286 at the December 14th report. That brought days to cover to 9.19931, a 32.86% decrease from the 13.7009 days to cover recorded at the prior short interest data release.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Mattel, Inc. (NASDAQ:MAT)’s prospects. The earliest insider trade took place on 08/01/2017. Georgiadis Mary Margaret Hasti gathered a total of 12.66 thousand shares of company at average share price of $19.61. The total for the purchase was set at $248.26 thousand. After this transaction, the CEO account balance stood at 116.79 thousand shares. The stock lost -37.53 percent since that insider purchase. On 04/24/2017, Scarborough Dean A, Director, purchased 47 thousand shares at a price per share of $21.95. This added 1.03 million shares to the insider’s fortune and the stock saw a -44.19 percent retreat in value since the news became public. This transaction left 77.57 thousand shares in the Director account. On 02/13/2017, Executive Chairman Sinclair Christopher A performed a purchase transaction worth $249.57 thousand. This purchase at $25.97 each has added 9.61 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded -52.83 percent decrease since the transaction was reported. The insider now is left with 95.59 thousand shares remaining in the account. Gros Richard R, who performs the EVP, Chief HR Officer job, bought 9.61 thousand shares for $250.05 thousand. The acquisition occurred on 02/07/2017 was priced at $26.02 per share. The share price plunged -52.92 percent since the reporting date. Gros Richard R now left with a stake of 14.74 thousand MAT stock worth $180.61 thousand after the insider buying.

Mattel, Inc. (MAT) is expected to jump by 13.06 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $21-month high price target. This represents a whopping 71.43 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $13.5, which represents a return potential of 10.2 percent when compared to the closing price of the stock of $12.25 on Friday, January 11. The lowest price target for the stock is $10 — slightly more than -18.37 percent from MAT’s current share price.

The shares are currently floating around the first support level of $11.88. Below this, the next support is placed in the zone of $11.5. Till the time, the MAT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 59.01 on daily chart, which may remain a cause for concern. If the price breaks below $11.5 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $12.47 mark may result into a pull-back move towards $12.68 level.

MAT shares accumulated 0.35 points or 2.94 percent on Friday to $12.25 with a light trade volume of 4.238 million shares. After opening the session at $11.86, the shares went as high as $12.31 and as low as $11.7224, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $4.23 billion and now has 345.29 million shares outstanding. Mattel, Inc. (MAT) stock has lost -3.24 percent of market value in 21 trading days.

MAT stock has a trailing 3-year beta of 1.31, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$2.71 a share in the trailing twelve months. The stock’s value has surged 22.62 percent year to date (YTD) against a decline of -21.88 percent in 12 month’s time. The company’s shares still trade -35.12 percent away from its 1-year high of $18.88 and 34.76 percent up from 52-week low of $9.09. The average consensus rating on the company is 0, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Mattel, Inc. (MAT) are trading at a P/E ratio of 22.45 times earnings reported for the past 12 months. The industry MAT operates in has an average P/E of 33.78. Its P/E ratio went as low as 16.49X and as high as 29.95 over the 5-year span. Further, it is sporting a 0.92 on the Price-to-Sales ratio. Compare this with the industry average P/S of 9.6. 34.4 percent is the gross profit margin for Mattel, Inc. and operating margin sits at -13 percent. Along with this, the net profit margin is -18 percent.

Analysts are forecasting revenue to suffer decline of -10.4 percent to $1.44B in the next fiscal quarter, while earnings are seen soaring by nearly -80.56 percent to -$0.14 per share. History has shown that shares in Mattel, Inc. have gone down on 19 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.18 per share, worse than the $0.2, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.44B, worse than the $1.49B analysts expected. Earnings are estimated to increase by -466.8 percent this year, 105.3 percent next year and continue to increase by 10 percent annually for the next 5 years.