3 ways the Barbie movie could drive more upside for Mattel stock as weekend box-office projections top $150 million
as a strong performance at the box office could translate into higher sales of Barbie products and lead the company to develop more content tied to its intellectual property.
Goldman Sachs raised its Mattel price target to $24, representing potential upside of 13% from current levels. These are the three factors that could help Mattel benefit from the potential success of the"Barbie" movie. While Mattel is set to collect licensing fees directly from the movie's box-office sales, it also has inked new licensing deals for various products that should help boost its licensing revenue.
"Mattel has engaged in dozens of partnerships that license the Barbie brand to popular consumer retail companies in order to elevate awareness and enthusiasm among consumers well beyond the traditional doll," Goldman Sachs analyst Stephen Laszczyk said."We believe that Mattel is collecting licensing fees from each brand for the right to license the Barbie logo/imagery for their own products.
"We believe that toy sales will benefit from a 'halo effect' over the medium-to-longer-term as adults, who may gain a renewed affinity for the brand because of the movie, become more inclined to gift Barbie with the next occasion. As a result, we believe that it is more likely that Barbie's seasonal sales cycle is amplified as a result of the movie rather than altered by a near-term spike in demand," Laszczyk said.
A bonus reason exists for Mattel stock to benefit from the"Barbie" movie, and that's the possibility of Mattel licensing more of its intellectual property for content creation, according to the note. Mattel's Hot Wheels toy line already has a movie in the works, being produced by J.J. Abrams with an expected release date in 2025.
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