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What Falling Estimates & Price Mean for Mattel (MAT)

Zacks Equity Research
Updated

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Mattel, Inc. MAT, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in MAT.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen four estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from earnings of 5 cents a share a month ago to its current level of a loss of 16 cents.

Also, for the current quarter, Mattel has seen four downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 22 cents a share from 41 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 15% in the past month.

Mattel, Inc. Price and Consensus

Mattel, Inc. Price and Consensus | Mattel, Inc. Quote

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So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Toys - Games - Hobbies industry, you may instead consider a better-ranked stock - Activision Blizzard, Inc. ATVI. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Mattel, Inc. (MAT) : Free Stock Analysis Report
 
Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
 
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