Introduction
There’s never been a couple quite like Barbie & Ken.
And nothing quite like the buzz surrounding their upcoming first Hollywood outing together!
They may be in their mid-60s now, but the iconic toy duo don’t look a day over 19. (Well, that would be difficult seeing as they are dolls and made of plastic!)
What is surprising, though, is by how much the share-price in Mattel (Barbie’s creator) has soared. Investors are now viewing them as a must-have, almost as much as girls once viewed Barbie the doll as a must-have.
So, what is the hype all about?
In this article we explain. Then analyse whether shares in Mattel will be worth it for those looking at trading investments. Beginner investors may also find this useful.
The Barbie Buzz
“Barbie the Movie” is live-action. It stars acclaimed actors Margot Robbie and Ryan Gosling as Barbie & Ken. There’s an all-star cast in supporting roles. It is said to have cost around $100 million to produce.
The movie itself was originally estimated to pull in $50 million during its opening weekend. But as the hype has surged, that estimate has climbed to almost double ($90-$100m).
But it’s not just about the movie that has spurred investors into Barbie-mania – it’s all the merchandising offshoots.
And that equals profit.
For instance:
- Big name fashion retailers, Gap and Forever 21, have Barbie-inspired apparel on the move
- 14 other content projects in development for Mattel, including a Warner Bros. movie based on the toy car brand Matchbox
- A growing interest based on Mattel’s other popular toy franchises
- Significant opportunities to expand into more movies and other areas in a similar way that Marvel did
- Television
- Live experiences
- Mobile gaming
- Digital collectibles
Mattel, it should be remembered, also own and market:
- Scrabble
- Pictionary
- American Girl dolls
- Fisher-Price toys
- And much more…
Anyone learning investing for beginners will know by now, it’s all about a company’s strong fundamentals. The same goes for those with experience trading investments.
So how reliable is Mattel as an investment?
Mattel Investors Pros & Cons
Pros
When it comes to strong fundamentals, Mattel certainly has that.
- It was founded in 1945 and is still going strong. In fact, Barbie the doll (born 1959), was named top global toy property in 2020 and 2021 by researchers The NPD Group.
- Market watchers Circana report that Barbie is still #1 as of today.
- Mattel was the world’s second largest toy maker in terms of revenue in 2018 (The Lego Group was #1). Though Mattel dropped to fourth position last year.
- Mattel is commercially active in 35 countries; products are selling in more than 150 countries (as of 2020 figures).
- As of writing, shares of Mattel have been up +18% in recent weeks.
- The toy industry is generally resilient.
- Mattel has one of the strongest product lineups in the industry.
- Its stock is more attractively valued than many others.
Despite the apparent solidity of Mattel, some analysts are flagging up negatives.
Cons
- Mattel could face challenges if the 2023 economy falters over the short term.
- The summer season is not generally kind to the toy industry, demand traditionally peters off.
- Mattel’s net sales in the first quarter of 2023 fell 22%.
- Barbie came second to Mattel’s Hot Wheels in the first quarter this year.
- Early analysis shows the focus on promoting the Barbie movie will impact second quarter figures.
“Barbie the Movie” Conclusion
On the face of it, negatives about Mattel would appear insubstantial. More will be revealed on July 26 when Mattel reports second quarter earnings.
Time will tell whether “Barbie the Movie” goes on to jettison Mattel’s year by boosting Barbie doll sales.
Only one possible snag – Barbie has a movie nemesis to contend with on opening weekend: American scientist “Oppenheimer”. He of course invented the atomic bomb and is subject of a new movie. Directed by Batman maestro Chris Nolan, it could have explosive consequences for Mattel.
The thing to remember is – sales of Barbie-related consumer items will likely skyrocket even if “Barbie the Movie” flops.
Investing in Mattel, then, should still prove an attractive proposition for investors.
The fact Mattel’s share price surged so dramatically is a great example of “market movement” that savvy investors are always on the lookout for.
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Please note: All information in this article is the opinion of Investment Mastery and not to be taken or used as financial or investment advice. You must always do your own research before investing.
