Goldman Sachs lowered its rating on Mattel to Sell from Neutral and set a new price target of $12 from $9, citing heightened execution risk as the company moves toward the second half of 2026. The bank said the $12 target is based on an 8x multiple of estimated 2027 earnings per share - down from a previous multiple of 10.0x.
Goldman’s revised valuation contrasts with the roughly 10% average upside the firm sees across its broader Entertainment coverage, and the bank described the move as a mark-to-market to other low-growth consumer products companies. That re-basing reflects a lower multiple applied to Mattel compared with what the stock had previously commanded.
Analysts led by Stephen Laszczyk characterized Mattel as "an execution story with a higher than average degree of operational complexity" for the coming six to 12 months. They identified three primary challenges the toymaker must manage:
- navigating a volatile geopolitical, macro and consumer backdrop;
- fending off competitive pressures within the toy industry; and
- delivering on newer investment initiatives in trading cards, collectibles and video games.
Goldman said it expects Mattel shares to trade "range-bound to lower," with downside risk to both earnings estimates and valuation until the company can produce steadier outcomes across its legacy toy operations and nascent growth areas. The bank pointed to muted results around the Masters of the Universe content release and its related app-based video game as specific examples that have reduced visibility into the company's return on investment for content-led strategies.
The analysts noted the Masters of the Universe franchise had been positioned as a flagship effort to convert intellectual property into multi-platform revenue, and its underwhelming traction has raised questions about the scalability of that model.
Goldman outlined several developments that would prompt a more constructive view on the stock. These include a successful repositioning of the Barbie brand that restores consistent growth; tangible proof points validating Mattel’s strategic investments and portfolio evolution; and stronger-than-expected top-line contribution from the company’s toy-related content slate.
In premarket trading on the day of the note, Mattel shares declined, reflecting investor reaction to the downgrade and the bank’s view that the stock faces both earnings and valuation pressure until clearer execution is demonstrated.
Investors and market participants will likely watch upcoming operating results and content performance closely for signs that the company can translate its investments into sustainable growth.