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MKM Partners Raised Mattel’s Price Target to $33 per Share

Yesterday’s Consumer Drops: HRL, ADM, HAS, and MAT

(Continued from Prior Part)

Price movement

Mattel (MAT) has a market cap of $11.2 billion. It fell by 2.2% and closed at $33.08 per share on April 5, 2016. The price movements on a weekly, monthly, and YTD (year-to-date) basis were 0.92%, 2.7%, and 23.3%, respectively.

Currently, Mattel is trading 0.46% above its 20-day moving average, 5.2% above its 50-day moving average, and 29.2% above its 200-day moving average.

The ALPS Sector Dividend Dogs ETF (SDOG) invests 2.2% of its holdings in Mattel. SDOG tracks an equal-weighted index of the five highest-yielding S&P 500 securities in each sector. SDOG’s YTD price movement was 9.9% as of April 5, 2016.

The WisdomTree Dividend Ex-Financials ETF (DTN) invests 2.0% of its holdings in Mattel. DTN tracks an index selected and weighted by dividends that exclude financial firms.

The market caps of Mattel’s competitors are as follows:

  • Walt Disney Company (DIS) – $158.7 billion

  • Hasbro (HAS) – $9.8 billion

MKM Partners raised Mattel’s price target

MKM Partners raised Mattel’s price target to $33 per share from $26 per share due to improvements in Barbie and Fisher Price products. MKM Partners also maintained its “neutral” rating for the company.

Performance in 4Q15 and 2015

Mattel reported 4Q15 net sales of $1,999.7 million—a rise of 0.29% compared to net sales of $1994.0 million in fiscal 4Q14. Sales of Mattel girls and boys and American Girl brands fell by 7.5% and 14.1%, respectively. However, sales of Fisher-Price brands and construction and arts and crafts brands rose by 8.2% and 0.15%, respectively, in fiscal 4Q15—compared to sales in fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $215.2 million and $0.63, respectively, in fiscal 4Q15—compared to $149.9 million and $0.44, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, Mattel reported net sales of $5,702.6 million—a fall of 5.3% YoY (year-over-year). The company’s cost of sales as a percentage of sales rose by 1.2% and its operating income fell by 17.3% in fiscal 2015.

Its net income and EPS fell to $369.4 million and $1.08, respectively, in fiscal 2015—compared to $498.9 million and $1.45, respectively, in fiscal 2014.

Mattel’s cash and cash equivalents fell by 8.1% and its inventories rose by 4.6% in fiscal 2015. Its current ratio and long-term debt-to-equity ratios fell to 1.9x and 0.68x, respectively, in fiscal 2015—compared to 2.9x and 0.71x, respectively, in fiscal 2014.

For an ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.

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