Mattel shares sink 5% after downgrade on 'execution risk'

Mattel Inc. shares fell 5% in Tuesday trading after UBS downgraded the stock to neutral from buy cut its price target to $17 from $18. Analysts say shares of the toy company's stock have risen more than 35% since March but there's been "little change on fundamentals." Moreover, the company now has the additional "execution risk" from an "untested management team and levered balance sheet." U.S. toy sales grew to $20.7 billion in 2017, which also leads analysts to think Mattel has created its own problems, stalling top-line recovery. "Because there is no evidence of industry structural declines, we think Mattel's market share losses have largely been self-inflicted," wrote analysts led by Arpine Kocharyan. Mattel shares are up nearly 10% for the year so far, outpacing the S&P 500 index which is up 3% for the period.