Google, Nvidia among Wednesday's market cap stock movers

By James Rogers

Mattel is ramping up its share repurchase efforts. Analyst firm UBS expects an earnings boost from the toy maker.

Mattel Inc. announced plans to repurchase $600 million shares in 2025 when the toy maker reported its fourth-quarter results late Tuesday. Analyst firm UBS said that the better-than-expected buyback could provide a significant earnings boost to the El Segundo, Calif.-based company.

In a note released Wednesday UBS analyst Arpiné Kocharyan wrote that Mattel's (MAT) $600 million buyback target was ahead of investor expectations. UBS estimated that every $100 million of share repurchases could add 3 cents to 4 cents to Mattel's earnings per share.

Mattel's stock is up 15.7% Wednesday, boosted by the company's better-than-expected outlook and its plans to navigate tariffs from President Trump. The stock is on pace for its largest daily percentage increase since Feb. 8, 2019, when it rose 23.22%, according to Dow Jones Market Data.

Related: Mattel's stock rallies, as outlook for profits - and Barbie - outweigh potential tariff impact

In a conference call to discuss the results, Mattel CFO Anthony DiSilvestro said that the company has been "very active" on the buyback front. "We resumed repurchases in 2023," he said, noting that the company repurchased $200 million in shares in 2023 and $400 million in 2024. "Now, we're accelerating to a targeted level of $600 million in 2025," he added. "And we have built in the benefit of that in terms of the lower share count and the benefit to EPS."

For 2025, Mattel expects adjusted earnings of $1.66 to $1.72 a share, surpassing the FactSet consensus estimate of $1.57 a share.

UBS analyst Kocharyan wrote that Mattel's guidance coming in ahead of expectations, despite the impact of newly announced tariffs, suggests "underlying upside was higher." UBS has a buy rating and $26 price target for Mattel.

Related: Toy-maker stocks drop, but here's why tariffs aren't really much of a threat to them

In a note released Wednesday J.P. Morgan analyst Christopher Horvers described Mattel's guidance as solid. "Notably, MAT included anticipated impacts of tariffs and mitigating actions in its 2025 guidance," he wrote. J.P. Morgan has a neutral rating and $23 price target for Mattel.

The U.S. implemented an additional 10% tariff on Chinese goods this week, prompting retaliatory tariffs from China.

Speaking during the conference call to discuss the results, Mattel CFO DiSilvestro said that the company has been "continuously optimizing and diversifying" its manufacturing footprint over the past several years. "Today, we source products from seven different countries," he said. In 2025 Mattel expects China will represent less than 40% of global production for the company's toys, compared with an industry average of about 80%, DiSilvestro added.

Related: Barbie boom fades at Mattel, but Hot Wheels - and adult collectors - are on an upswing

With the U.S. representing about half of Mattel's global toy sales, the company's tariff exposure in the U.S. related to China should be about 20% of global production, according to the CFO.

The U.S. had also planned to start collecting new 25% tariffs on goods imported from Mexico and Canada this week. However, on Monday, Trump said that the Mexican and Canadian tariffs have been paused for roughly one month.

DiSilvestro said that Mattel sources less than 10% of its toys from Mexico and has no sourcing from Canada. "By 2027, no single country is expected to represent more than about 25% of total global production or about half of that in terms of U.S. sales," he added.

Related: Mattel's quarterly sales fell. But the months ahead will be better, executives say.

Mattel shares have risen 11.3% in the last 12 months, compared with the S&P 500 index's SPX gain of 20.6%.

Bill Peters contributed.

-James Rogers

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Wednesday, February 5, 2025

We have an eventful morning in the stock market this Hump Day, with the next installment for Jobs Week coming in hotter than expected for last month, with an impressive earnings beat from a stock that is also a household name, but that which brought a Zacks Rank #4 (Sell) rating into this morning’s earnings report.

ADP Jobs Report Strong in Customer Services

Private-sector payrolls for January have been released this morning, with Automatic Data Processing ADP unveiling +183K new private-sector jobs last month — well ahead of the +150K expected. The previous month was revised notably higher, as well: +176K from an originally reported +122K. Today’s headline figure is the highest since October of last year.

ADP pointed out that customer-facing jobs performed much better last month than did goods-producing jobs. This shouldn’t come as any surprise to those who follow these metrics, but it is worth paying attention to, as strong employment in some areas are more than making up for weakness in others. Trade/Transportation/Utilities led the way with +56K new private-sector positions filled, followed by Leisure & Hospitality at +54K and Education/Healthcare at +20K.

On the flip side, Manufacturing lost -13K positions in the private sector for January. Professional & Business Services were positive, but muted compared to recent months. Also, the spread between wage gains among Job Stayers (+4.7%) and Job Changers (+6.8%) is about as narrow as we’ve seen it; this metric has only been around the past few years or so. It’s also pretty low on both sides; the labor market may be healthy, but it currently does not seem to be leading to higher inflation.

U.S. Trade Deficit Sinks to Deepest Levels in Almost 3 Years

Meanwhile, we see a -$98.4 billion in the U.S. Trade Deficit for December this morning, a deeper cut than the -$96.8 billion estimated, and a good distance worse than the previous month’s revised -$78.9 billion. Imports sank -2.6% while Exports were +3.5%; as we’ve seen in other trade prints in recent weeks, we expect much of this activity is pulled forward from an uncertain future with global tariffs threatened and in some cases enacted by the Trump administration.

Disney Posts Stronger-than-Expected Q1 Results

The Walt Disney Co. DIS released fiscal Q1 earnings ahead of today’s opening bell, with earnings of $1.76 per share well above the $1.44 anticipated, for an earnings beat of +22.22%. It’s the 8th straight earnings beat for the entertainment conglomerate. Revenues of $24.69 billion in the quarter marginally surpassed expectations. Shares are up +1.5% on the news, nearly doubling its +1.75% gains year-to-date. For more on DIS’ earnings, click here.

Check out the updated Zacks Earnings Calendar here.

What to Expect from the Stock Market Today

After the market opens, we’ll see final S&P Services PMI for January, along with ISM Services for last month as well. Both are expected to remain well above the 50-level which determines growth from contraction. This would also gibe with this morning’s ADP report, which continues to assert strength in Services while Goods-producing remains challenged.

After today’s close, Qualcomm QCOM will be one among many companies reporting quarterly results. Earnings are anticipated to fetch gains of +6.55% for its fiscal Q1, while Revenues look to add +9.9% year over year. The stock currently has a Zacks Rank #2 (Buy). Ford F, Arm Holdings ARM and MicroStrategy MSTR will be some of the other names we’ll be watching for earnings this afternoon.

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