A Sustained Recovery in the Cards for Mattel
We see shares of the narrow-moat toymaker as modestly undervalued as management works to kickstart its owned and licensed properties.
With a renewed focus on brand purpose, product innovation, and consumer engagement we think Mattel's (MAT) prospects are improving and we see shares as modestly undervalued at today's levels.
Before the beginning of 2015, Mattel was very operationally driven, trying to focus on developing products aligned with consumer demand while continuing to cut costs. However, the company wasn't spending its dollars tactically on enhancing the creative and content landscapes of the business, which have been primary areas for growth across the toy industry. But despite its past shortcomings, in our opinion, the outlook for Mattel's brand equity has changed under the current management team (including CEO Christopher Sinclair and COO Richard Dickson), which has restored the company's creative bent.
Jaime M. Katz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.