Two major Wall Street banks have trimmed their recommendations on Mattel after the company's latest earnings report, highlighting growing doubts about the visibility of its main franchises and an investment-heavy near term that could weigh on stock performance.
Citi's James Hardiman downgraded the stock to Neutral, saying the "Mattel thesis has changed suddenly and substantially." In premarket trading, the shares were down about 27 percent as the firm said it was stepping back to let management "tighten up the narrative." Citi also sharply reduced its out-year projections and cut its target price from $25 to $16.
Hardiman noted that although Mattel's planned investments in 2026 could generate returns further out, the intervening "bridge year" risks reigniting investor concern about demand for traditional toys. He pointed to Hasbro's strong beat-and-raise as a contrast and said the question of the company's portfolio durability is likely to be debated in an industry that he described as increasingly divided between "haves and have nots."
JPMorgan's Christopher Horvers reached a similar conclusion, downgrading Mattel to Underweight and lowering his December 2026 price target to $14 from $23. Horvers cited a "lack of visibility to Barbie improving," pointing to what he characterized as a hangover for the brand following years of innovation and the 2023 film.
Mattel itself projects that Barbie will decline again in 2026 before recovering in 2027. Horvers described that outlook as creating an "investment year" for the company - a phase that can be "often scary from a stock perspective." He added that inventory-clearing efforts, difficult content comparisons and a heavy dependence on holiday demand underpin the uncertainty, and that such factors support valuing Mattel nearer the lower end of its historical range.
Context on investor reaction
Both analyst notes emphasize the near-term uncertainty rather than disputing potential long-term benefits from planned spending. The firms revised down their expectations and pushed target prices lower to reflect reduced visibility around the company's core brands and the risks inherent in an investment-focused year.
Third-party evaluation mention
Separately, a market tool referenced in the company's coverage evaluates MAT alongside thousands of companies each month using a range of financial metrics, and it highlights that such models look beyond popularity to assess fundamentals, momentum and valuation. The tool's promotional copy points to past winners but does not alter the banks' assessments or the specific forecasts noted above.
Bottom line - Analysts at Citi and JPMorgan have both reduced their ratings and price targets for Mattel, citing diminished visibility around key brands, a potentially difficult investment year and inventory and content-comparison headwinds that justify more conservative valuation assumptions.