UBS has left its Buy rating on Mattel Inc. (MAT) intact and reiterated a $30.00 price objective despite the company's fourth-quarter revenue and earnings coming in under Wall Street forecasts. Mattel's shares were trading around $16.16 at the time the update noted the stock appears undervalued under InvestingPro Fair Value estimates, and analysts on the aggregate maintain a Buy consensus with a 1.79 rating.
The investment bank pointed to a 7% rise in net revenue that nevertheless fell short of market expectations. UBS described the broader retail backdrop as "moderately positive," with retailers operating with relatively clean inventory positions. The firm also emphasized Mattel's solid balance-sheet metrics, noting a price-to-earnings ratio of 12.12 and a current ratio of 2.15 as indicators of financial stability.
A focal point for UBS is Mattel's stepped-up spending on digital gaming capabilities. UBS framed those expenditures as substantial reinvestment in the company's growth agenda and raised the question of whether incremental operating expenses in 2026 will deliver earnings upside in 2027 that exceeds the company's current guidance range.
UBS quantified the digital program as roughly $0.37 of earnings today, and calculated that, if valued at a multiple in the 16-17x range, the initiative could be worth about $5-$6 per share. While management has said the program should be earnings accretive as early as fiscal 2027, UBS cautioned that investors may be hesitant to credit the stock with that future earnings growth in light of Mattel's recent guidance miss.
On the forecast front, InvestingPro data cited in the UBS note shows Mattel's consensus EPS estimate for fiscal 2026 at $1.61, up from the current $1.24 figure. The company has also been conducting share repurchases, according to the same data.
The backdrop to UBS's analysis includes Mattel's reported fourth-quarter 2025 results, which revealed an earnings-per-share (EPS) print of $0.39 versus an expected $0.54, and revenue of $1.77 billion compared with the anticipated $1.85 billion. Those misses prompted DA Davidson to lower its price target to $18.00 from $25.00 while still retaining a Buy rating. DA Davidson attributed the shortfall in part to stalled retailer replenishment orders in December, which led both Mattel and retailers to clear inventory.
JPMorgan took a different stance, downgrading Mattel from Neutral to Underweight. The bank cited concerns about the company's declared "investment year," under which Mattel plans to allocate $110 million to digital games and $40 million toward performance marketing aimed at revitalizing innovation. JPMorgan sharply reduced its target to $14.00 from $23.00.
Collectively, the broker reactions underscore the market's mixed view of Mattel's near-term performance versus its strategic investments. Some firms continue to view the shares as a buy at current levels, while others have trimmed targets or reduced ratings as they weigh the execution risk tied to an elevated investment cadence.
Contextual note - The company's financial metrics, guidance commentary, broker price targets, and planned spending allocations are those cited in analyst reports and company disclosures referenced above.