Mattel stock price erupts on Jefferies upgrade

Written by: Michael Harris
June 3, 2020
  • Mattel stock price has jumped 6% after Jeffries upgraded the stock to buy
  • Stock price target hiked from $9.00 per share to $13.00 per share
  • Having lost 85% of the value since 2013, the buyers are looking to recover some losses in the long-term

Shares of Mattel (NASDAQ: MAT) have jumped 6% on Wednesday after Jeffries upgraded the toy maker’s stock from “hold” to “buy”. Today’s surge has pushed the stock price above $10 for the first time since March. 

Fundamental analysis: Mattel stock to outperform in the second half of the year

Mattel stock price has been enjoying a great day after Jeffries upgraded the stock to “buy”.

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“Following a conversation with mgmt, channel checks and our analysis of web traffic and tend data, we have greater confidence in 2H stability and see an oppty for MAT outperform modeled EBITDA in 2020,” analysts at Jeffries wrote

Jeffries also upgraded the stock price target to $13 per share from $9 per share. The new target represents a nearly 30% premium on the current market price. The current consensus on the target price for MAT shares is $11.50 per share.

“While we don’t think the company will achieve its original $575-$600M 2020 EBITDA target, we do think it’s possible MAT will beat current consensus at $466M. We believe that the June Q is likely to mark a low, while sales growth and cost savings could surprise to the upside”.

A month ago, the toymaker reported quarterly results that missed the market consensus for the second consecutive quarter. Mattel reported a decline in sales across a variety of sections, including Dolls, Infant, Toddler and Preschool and Action Figures, Building Sets and Games.

Technical analysis: A new 12-week high

Shares of Mattel gapped 6% higher today to trade above the $10.00 mark for the first time since early March. The price action is now approaching the key short-term resistance – 100-DMA and 200-DMA – at between $10.60 and $11.05. 

Mattel stock daily chart (TradingView)

More importantly, the buyers have now cleared the resistance around $9.00, which previously acted as long-term support. Looking more mid-term, the buyers are now likely to press for a move above $12, where the 100-WMA is located.

Mattel stock price lost more than 50% during the coronavirus-related market selloff to hit the 27-year low. Shares of the toymaker grossly underperformed the overall market by losing 85% of the value since 2013.

Summary

Shares of Mattel popped 6% higher after Jeffries upgraded the stock from “hold” to “buy”. Mattel is one of the worst-performing stocks lately, having lost around 85% of its value in the last seven years.