NEW YORK (TheStreet) --Shares of Mattel Inc. (MAT) - Get Mattel, Inc. Report are lower by 4.78% to $29.70 in early afternoon trading on Friday, as BMO Capital expresses concerns that the toy company is losing share to competitors, the Associated Press reports.
Earlier today BMO Capital issued an analyst note lowering its price target on Mattel to $28 from $30, as well as Hasbro (HAS) - Get Hasbro, Inc. (HAS) Report to $55 from $57 as the research firm believes "domestic toy industry appears to have taken a turn for the worse in the fourth quarter declining about 2% after being up nearly 4% over the first nine months."
"Furthermore, we believe Mattel has been losing share to competitors, most of them privately held, and has seen domestic retail slide by 12% so far in the quarter," BMO added.
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Other toy maker stocks falling today include Hasbro, lower by 5.28% to $55.28, Leap Frog Enterprises (LF) , down by 3.26% to $4.74, and Build-A-Bear Workshop (BBW) - Get BuildABear Workshop, Inc. Report , lower by 4.19% to $18.97.
Separately, TheStreet Ratings team rates MATTEL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MATTEL INC (MAT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MAT's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MAT's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.61 is high and demonstrates strong liquidity.
- The gross profit margin for MATTEL INC is rather high; currently it is at 53.21%. Regardless of MAT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MAT's net profit margin of 16.41% compares favorably to the industry average.
- MAT, with its decline in revenue, underperformed when compared the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- MATTEL INC's earnings per share declined by 19.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MATTEL INC increased its bottom line by earning $2.60 versus $2.21 in the prior year. For the next year, the market is expecting a contraction of 24.2% in earnings ($1.97 versus $2.60).
- Looking at the price performance of MAT's shares over the past 12 months, there is not much good news to report: the stock is down 31.44%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- You can view the full analysis from the report here: MAT Ratings Report