Shares of toy products and content creator Mattel, Inc. NYSE: MAT stock is a rare performer as shares are up 20% year-to-date reaching 52-week highs as benchmark indices plunge in the opposite direction. The iconic toy manufacturer pulled a surprise profit in its fiscal Q1 2022 when analysts expected a loss in addition to beating top-line estimates. The sentiment reversed back to positive after supply chain issues dampened expectations in its prior quarter. All its factories are completely operational as it navigates its global supply chain and logistics brilliantly. In fact, the Company had its highest first-quarter results on record for net sales, operating income, and EBITDA. The turnaround has been completed and the Company plans to maximize on its powerful entertainment IPs which include Barbie, Hot Wheels, and Fisher Price. The Company extended its global licensing deals with Disney NYSE: DIS and Universal. The Company has many movies and entertainment projects including Masters of the Universe, Hot Wheels movie, and its Barbie movie as well as NFTs and mobile games. The Company also has an ESG initiative to reduce plastic packaging by 25% per product and incorporate 100% recycled bio-based plastic by 2030. Prudent investors looking for some green in a sea of red can look for opportunistic pullbacks in shares of Mattel.
Q1 Fiscal 2022 Earnings Release
On Apr. 27, 2022, Mattel released its fiscal first-quarter 2022 results for the quarter ending March 2022. The Company reported earnings-per-share (EPS) profits of $0.08 beating analyst estimates for a loss of (-$0.04), by $0.12. Revenues rose 19.1% year-over-year (YoY) to $1.04 billion, beating analyst estimates for $0.92 billion. Mattel CEO Ynon Kreiz commented, “Having completed our turnaround in 2021, we are firmly in growth mode and operating as an IP-driven, high-performing toy company. Mattel’s supply chain is playing a key role in our success. All of our factories are fully operational, and we are working with our retail partners to ensure the product is available on shelves to meet consumer demand. The full-year outlook is strong, we expect to grow market share, and we are reiterating our 2022 guidance and 2023 goals.”
Reaffirmed Guidance Estimates
Mattel reaffirmed its guidance expectations for fiscal full-year 2022 EPS in the range of $1.42 to $1.48 versus $1.45 consensus analyst estimates on revenue growth of 8% to 10% or $5.90 billion to $6 billion versus $5.83 billion consensus analyst estimates. The Company reaffirmed fiscal full-year 2023 EPS above $1.90 versus $1.88 consensus analyst estimates with net sales in the high single digits.
Conference Call Takeaways
CEO Kreiz pointed out that Mattel was the top toy company in the world in leader categories, vehicles, dolls, infant toddlers, and preschool. He underscored its capital-light approach by strategically investing in manufacturing capacity to enhance operational efficiencies while bolstering productivity. He explained how the Company is leveraging its IP through several verticals including physical toys, digital properties, and motion pictures. He detailed some of Mattel’s IP licensing deals and partnerships. The Company has contracted JJ Abram’s Bad Robot to produce its Hot Wheels movies. The Barbie movie is in principal photography in London with an all-star cast consisting of Margot Robbie, Will Ferrell, and Ryan Gosling. It’s expected to release on July 21, 2023. Its mobile games unit Mattel163 mobile games launched the Master of the Universe game on Roblox and sold out new NFT sets for Barbie and Hot Wheels. The Company plans many more NFT launches in 2022.
MAT Stock Trajectories
Using the rifle charts on a weekly and daily time frame provides a precise view of the landscape for MAT stock. The weekly rifle chart made its most recent bottom near the $21.69 Fibonacci (fib) level. Shares spiked on the earnings release to trigger a breakout on the weekly market structure low (MSL) buy trigger above $23.76. The weekly 5-period moving average (MA) support is starting to rise at $23.47 followed by the 15-period MA at $23.32. The weekly upper Bollinger Bands (BBs) touched $26.94. The weekly stochastic crossed back up on a mini inverse pup attempt as it coils through the 60-band. The weekly 50-period MA is rising near the $21.69 fib. The daily rifle chart uptrend is rising at $26.06 followed by the 15-period MA at $24.04. The daily upper BBs sits at $19.43 as the stochastic mini pup drives through the 90-band. The daily 50-period MA support sits at $23.50, and the daily 200-period MA sits at $21.88. Prudent investors can watch for opportunistic pullbacks levels at the $24.74 fib, $23.76 weekly MSL trigger, $22.59 fib, $21.69 fib, $21.05 fib, $20.29, $19.01 fib, and the $18.15 fib level. Upside trajectories range from the $30.57 fib up towards the $35.60 price level.
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