Mattel: Does This Toy Story Have An Upcoming Twist?

Mattel, Inc. MAT shares are now down more than 20 percent in 2017. But with a number of potential catalysts on the horizon, Mattel shareholders are anticipating some big news in the coming weeks.

The Year Thus Far And Upcoming Analyst Day

Mattel’s has lagged its way into a 6.9-percent dividend yield, a payout that analysts and investors alike believe is too large. With the company’s June 14 Analyst Day now less than a month away, the market already seems to be pricing in a dividend cut.

That cut will likely come within the next month, UBS analyst Arpine Kocharyan said.

“While this remains a board decision which could come prior to June 14 (MAT’s annual meeting is scheduled for May 19), we note such an announcement may not come without a roadmap for re-investment of those dollars back into business — along with new CEO strategic plan which we expect Mattel to unveil at analyst day,” Kocharyan said.

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New CEO Margo Georgiadis will likely be looking to make a splash and show investors she has an aggressive turnaround plan in place. That pan could be revealed as soon as the shareholder meeting on Friday.

Wildcard Catalysts

UBS predicts Mattel will opt to reduce its payout to the 2–3 percent range in an attempt to keep income investors from bailing on the stock.

Benzinga has reported an elevated amount of option trading surrounding Mattel in recent weeks, mostly targeting the shareholder meeting and Analyst Day.

A potential wildcard catalyst for the stock could also be a M&A deal. Earlier this year, rumors about a potential merger with rival top company Hasbro, Inc. HAS sent shares of both companies higher.

Mattel stock has been floundering for a while now, but investors should soon get some clarity about what the company’s next move will be. For investors, that clarity could result in a major trading opportunity.

UBS believes the bad news is already priced into the stock. The firm maintains a Buy rating and $29 price target for Mattel.