Will This Downgrade Hurt Mattel (MAT) Today?

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Mattel (MAT) was downgraded to "underperform" from "market perform" by BMO Capital Markets Monday.

Shares of Mattel fell 2.3% to $38.49 in morning trading.

The firm cut its price target for the toy maker to $33 from $40. BMO analyst Gerrick L. Johnson sees a risk to consensus earnings expectations.

"We are downgrading shares as we see risk to MAT's earnings estimates for 2014 and 2015 owing to cyclical declines in core product lines like Barbie and Hot Wheels, deteriorating sales of Monster High, and disappointing performance of new lines like Max Steel and Ever After High," Johnson wrote. "The toy market in mature markets continues to be weak, while emerging markets face challenges from declines in equity markets and weakening currencies. Finally, we think there could be risk to MAT's gross and operating margins owing to mix, lack of sales leverage, and an exhaustion of cost savings opportunities. MAT shares could experience some support owing to its 3.8% dividend yield. However, should earnings continue to deteriorate, even with downside support from its dividend, we believe MAT shares will still find themselves in the proverbial doghouse and underperform the overall market and publicly traded peers."

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Separately, TheStreet Ratings team rates MATTEL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

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