As per the Wall Street Journal’s report, Mattel (NASDAQ:MAT) has secured an undisclosed investment from activist investor Barington Capital. The investor has proposed some strategic changes to improve MAT’s share price. Following the announcement of the news, MAT stock gained over 4% in yesterday’s extended trading session.
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Mattel is a multinational toy and entertainment company known for some iconic brands such as Barbie, Hot Wheels, and Fisher-Price.
Changes Proposed by the Investor
It is worth highlighting that Barrington Capital is pushing the company to take certain initiatives to drive the share price higher. These alternatives include making changes in its Fisher-Price and American Girl businesses, reducing stock-based compensation, and undertaking a $2 billion share buyback program. Further, the investor has urged Mattel to divide the roles of CEO and Chairman, currently both held by Ynon Kreiz since May 2018.
Barrington Founder James Mitarotonda believes that these changes, coupled with the company’s ongoing efforts to strengthen its core fashion-doll and toy vehicle businesses, could potentially double its share price within a three-year horizon.
Is MAT Stock a Good Buy?
Overall, Wall Street analysts are cautiously optimistic about MAT stock with a Moderate Buy consensus rating based on two Buys and two Holds assigned in the past three months. The average price target of $20.67 per share implies a 13.1% upside potential. Shares have declined 14.4% in the past year.
