Mattel’s ( NASDAQ: MAT ) 2023 earnings are due to be impacted negatively by still-elevated retail inventories, according to Stifel.
The firm’s analysts pointed to channel checks at Target ( TGT ) and Walmart ( WMT ) as well as discussions with other manufacturers as signs that shelves remain stocked with toys even after holiday sales. As such, new orders for toys may be delayed into the second half od 2023.
“Our conclusion is that while retail inventory is lower relative to a few months ago, we're not convinced that this leads to meaningful replenishment by retailers. Hence, we are adjusting estimates on Mattel in order to reflect more caution around our near-term assumptions, but keep our Buy rating on the shares,” the team wrote.
2023 EPS estimates were trimmed to $1.60 from a prior $1.77. The analyst consensus stands at $1.69. The negative impact is expected to be borne in the first half of 2022. While maintaining a Buy rating, Stifel’s analysts cut their price target to $26 from $29.
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Mattel estimates trimmed at Stifel on retail inventory impact