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Mattel, Inc. (MAT), together with its subsidiaries, designs, manufactures, and markets various toy products. Its products comprise fashion dolls and accessories, vehicles and play sets, and games and puzzles. The company offers its products under the Mattel Girls and Boys brands, including Barbie, Polly Pocket, Little Mommy, Disney Classics, Monster High, Hot Wheels, Matchbox, Tyco R/C, CARS, Radica, Toy Story, WWE Wrestling, and Batman; Fisher-Price brands comprising Fisher-Price, Little People, BabyGear, View-Master, Dora the Explorer, Go Diego Go!, Thomas and Friends, Mickey Mouse, Sing-a-ma-jigs, See ?N Say, and Power Wheels; and American Girl Brands, such as My American Girl, Bitty Baby, McKenna, and the newest Girl of the Year.

It is scheduled to report its Q2 2012 results on July 17, 2012, before the market opens. In this article I will recap the historical results of the company, latest EPS estimates vs. surprises, latest developments and closest competitors' development.

Technical Overview


The stock has a market capitalization of $10.83B and is currently trading at $31.80 with a 52 week range of $22.70 - $34.62. The stock performance year to date: 16.83%. It is currently trading above 200 SMA, but below 20and 50SMA.

Key Metrics

  • Trailing P/E: 14.65
  • Forward P/E: 11.95
  • Price/Sales: 1.73
  • Price/Book: 4.10
  • PEG Ratio: 1.73
  • Total Debt: 1.55B
  • Annual dividend yield: 3.40%
  • Return on Equity: 29.46%
  • Return on Assets: 12.64%

Recent EPS Actuals vs. Estimates

The company has failed to meet analysts' estimates in the last quarter. In the last quarter it reported $0.06 EPS, failing to meet analyst estimates of $0.07.

The consensus EPS estimate is $0.21 based on 15 analysts' estimates, down from $0.23 a year ago. Revenue estimates are $1.13B, just below $1.16B a year ago. The median target price by analysts for the stock is $37.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On April 17, 2012, Caris & Company reiterated Above Average rating for the company.
  • On February 14, 2012, Longbow reiterated Buy rating for the company.
  • On February 13, 2012, UBS reiterated Buy rating for the company.
  • On January 31, 2012, the company was downgraded from Buy to Hold at Stifel Nicolaus.
  • On January 31, 2012, the company was downgraded from Buy to Above Average at Caris & Company.

Latest Developments

  • On April 16, 2012, Mattel, Inc. announced that the Board of Director declared a second quarter cash dividend of $0.31 per share on the Company's common stock. The dividend will be payable on June 15, 2012 to stockholders of record on May 23, 2012.
  • On March 29, 2012, Mega Brands Inc. announced a multi-year global licensing partnership with Mattel, Inc. to develop construction toys based on the iconic kids brands, Barbie and Hot Wheels.
  • On February 1, 2012, Mattel, Inc. announced that it completed the acquisition of HIT Entertainment from a consortium of funds led by Apax Partners for $680 million in cash.
  • On January 31, 2012, Mattel, Inc. announced that its Board of Directors declared a first quarter cash dividend of $0.31 per share on the Company's common stock. The dividend will be payable on March 9, 2012, to stockholders of record on February 23, 2012.

Competitors

Mattel, Inc. operates in Toys & Games industry. The company could be compared to American Greetings Corp. (AM-OLD), Hasbro Inc. (HAS), JAKKS Pacific, Inc. (JAKK), and LeapFrog Enterprises Inc. (LF). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

(click to enlarge)MAT Chart

MAT data by YCharts

Competitors' Latest Development

  • On July 6, 2012, LeapFrog Enterprises, Inc. announced that Chief Financial Officer Mark A. Etnyre has resigned from the Company in order to spend more time with his family and pursue personal interests.
  • On June 18, 2012, Reuters reported that private equity firm Oaktree Capital Management LP terminated talks over a standstill pact with JAKKS Pacific Inc. after failing to agree on terms.
  • On June 13, 2012, LeapFrog Enterprises, Inc. announced a new partnership to bring a range of stationery and activity products to market this July and just in time for back-to-school.
  • On June 7, 2012, American Greetings Corp announced that it has acquired assets, through a subsidiary in the United Kingdom, from Clinton Cards PLC and certain of its subsidiaries.
  • On May 25, 2012, JAKKS Pacific Inc. announced that it has commenced an offer to its shareholders to purchase up to 4,000,000 shares of its common stock at a price of $20 per share.
  • On May 3, 2012, LeapFrog Enterprises, Inc. announced that for fiscal 2012, it expect net sales to increase by 10%-13% compared to 2011. Net income per diluted share (EPS) to be in the range of $0.52-$0.57. For the second quarter of 2012, it expects net sales to increase by 17%-22% compared to the second quarter of 2011.
  • On April 26, 2012, American Greetings Corp announced that for fiscal 2013, it expects revenues to be flat compared to fiscal 2012.
  • On April 18, 2012, JAKKS Pacific Inc. announced that for fiscal 2012, it continues to expect an increase in net sales of 6.2% to 7.4% to approximately $720 million to $728 million, with diluted earnings per share in the range of approximately $1.01 to $1.07, excluding any financial and legal advisory fees.
  • On February 21, 2012, JAKKS Pacific Inc. announced that the Board of Directors has declared a regular quarterly cash dividend of $0.10 per common share. The dividend is payable on April 2, 2012, to shareholders of record at the close of business on March 15, 2012.
  • On February 15, 2012, JAKKS Pacific Inc. announced a license agreement with Khush, a leading developer of intelligent music applications, to create an innovative new product inspired by the best-selling "Songify" app. Songify, developed in part by YouTube sensations The Gregory Brothers along with Khush, launched in the summer of 2011 as the first mobile app that turns speech into music instantly.
  • On February 9, 2012, LeapFrog Enterprises, Inc. announced that for fiscal 2012, it expects net sales to increase by 6% to 8% compared to 2011. Net income per diluted share to be in the range of $0.40 to $0.45. For the first quarter of 2012, it expect net sales to increase by 20% to 30% compared to the first quarter of 2011 and Net loss per share to be in the range of $0.26 to $0.30. The Company reported revenues of $455 million in fiscal 2011 and revenues of $39.68 million in the first quarter of 2011.
  • On January 23, 2012, American Greetings Corporation announced that it has successfully amended its revolving credit facility. The amendment extends the term of the agreement from June 2015 to January 2017, increases the amount that can be borrowed under the credit facility from $350 million to $400 million, reduces the commitment fee due on undrawn borrowings, and lowers the margins paid on borrowings.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: Mattel