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Mattel (MAT) Stock Rises on Universal Partnership Announcement

Mattel, Inc. MAT entered a multi-year global licensing agreement with Universal Brand Development to develop a toy line based on the Trolls franchise. Following the announcement, shares of the company moved up 2.8% during trading hours on Mar 29.

Built upon its existing licensing arrangement with Universal for DreamWorks Animation’s Spirit Riding Free, Illumination’s Minions, Universal Pictures and Amblin Entertainment’s Jurassic World and Universal’s Fast & Furious, the company anticipates launching the latest products in fall 2023.

Trolls is one of the beloved global entertainment brands of today. Buoyed by its heartwarming stories and colorful characters, the franchise has inspired live-entertainment touring shows, Universal Studios Parks’ (attractions across the globe), and high-fashion collaborations, toys and lifestyle collections. Nevertheless, with the agreement, the company attained the rights to develop Trolls toys, including dolls, vehicles, plush and games.

In this regard, Nick Karamanos, senior vice president, Entertainment Partnerships, Mattel. “We look forward to building upon our strong relationship with Universal and DreamWorks and making great toys that will inspire children to find their happy place with a spectacular Trolls line.”

Focus On Key Brands

Mattel has been focusing on licensed brands and lucrative product associations to drive growth.

In January 2022, the company entered a multi-year global licensing agreement with Disney to develop and market the latter’s Princess and Frozen branded product lines. Per the agreement, Mattel will develop toy lines for Disney Consumer Products, Games and Publishing, including fashion dolls, small dolls and figures.

The company will design dolls based on the characters from Disney Princess, including Aladdin, Beauty and the Beast, Brave, Cinderella, The Little Mermaid, Mulan, Pocahontas, The Princess and the Frog, Sleeping Beauty, Snow White and the Seven Dwarfs, Tangled, Disney Frozen, The Little Mermaid Live Action, Moana D+ Series, Tiana D+ Series, Aladdin Live Action, Beauty & the Beast Live Action, Cinderella Live Action and Mulan Live Action.

The company anticipates launching the products in 2023.

Price Performance

 

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Zacks Investment Research


Image Source: Zacks Investment Research

 

Shares of the company have gained 8.9% so far this year compared with the industry’s 5.1% growth. The company is benefiting from robust e-commerce growth, a highly-efficient supply chain and strong demand for its products. This, along with initiatives to capture the full value of its IP and transform into a high-performing toy company, bodes well.

Going forward, the company is focused on strong cost and productivity initiatives to support growth, operate more efficiently and rebuild margins. Focus on new content and digital engagement is also likely to drive growth in the upcoming quarters.

Earnings estimates for 2022 have increased in the past 60 days, depicting analysts’ optimism regarding the stock’s growth potential.

Zacks Rank & Key Picks

Mattel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Consumer Discretionary sector are Funko, Inc. FNKO, JAKKS Pacific, Inc. JAKK and Bluegreen Vacations Holding Corporation BVH.

Funko sports a Zacks Rank #1 at present. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have declined 10% in the past year.

The Zacks Consensus Estimate for Funko’s current financial-year sales and EPS (earnings per share) suggests growth of 22.7% and 26.8%, respectively, from the year-ago period’s reported levels.

JAKKS Pacific presently sports a Zacks Rank #1. JAKK has a trailing four-quarter earnings surprise of 63.1%, on average. Shares of the company have surged 115% in the past year.

The Zacks Consensus Estimate for JAKK’s current financial-year sales and EPS indicates growth of 4.4% and 8.5%, respectively, from the year-ago period’s reported levels.

Bluegreen Vacations presently carries a Zacks Rank #2 (Buy). BVH has a trailing four-quarter earnings surprise of 425.1%, on average. The stock has surged 63.2% in the past year.

The Zacks Consensus Estimate for BVH’s current financial-year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s reported levels.

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Mattel, Inc. (MAT) : Free Stock Analysis Report

JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report

Funko, Inc. (FNKO) : Free Stock Analysis Report

Bluegreen Vacations Holding Corporation (BVH) : Free Stock Analysis Report

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