Mattel (MAT) has inked a multi-year global licensing agreement with Walt Disney (DIS). Under the terms of the agreement, the company will have global licensing rights to develop toys based on Disney’s high-profile franchises, Disney Princess and Frozen. MAT shares jumped 4.33% to close at $20.46 on Wednesday.
Mattel is a U.S. company that designs, manufactures, and sells toys. Its iconic brands include Barbie, Hot Wheels, Fisher-Price, American Girl, and Thomas & Friends. The company has scheduled its upcoming earnings report for February 09.
Licensing Agreement
The multi-year licensing agreement grants Mattel the opportunity to create innovative and inspiring lines based on Disney’s iconic stories and characters. The agreement also builds on the two companies’ existing licensing agreements for the Toy Story and Cars franchises. The two have also inked a global licensing agreement for Lightyear.
The company will develop fashion dolls and figures based on high-profile characters, including Aladdin, Beauty and the Beast, Cinderella, and The Little Mermaid. The products should be available for sale in retailers around the globe starting in 2023.
Analysts’ Take
MKM Partners analyst Eric Handler upgraded Mattel stock to a Buy from a Hold and increased the price target to $30 from $24, implying 46.63% upside potential to current levels. The analyst’s bullish rating is based on the company’s upcoming product lineup and capital structure. According to the analyst, the company is well-positioned for the year, backed by a solid product portfolio, making its sale growth guidance conservative.
Consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average Mattel price target of $28.33 implies 38.47% upside potential to current levels.
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