Pitch: Iconic toymaker trading below historical multiples, despite new CEO in place since 2018, successful turnaround with material cost savings, good execution of core toy business, and multiple avenues of optionality to monetize IP library. Stock partially abandoned by investors due to leadership missteps in earlier years and misperception that MAT is a dying business.
Valuation: Trades at 13.5x EBIT, below the long-term 15x multiple. Similarly priced to closest peer HAS at 16x forward PE. Aspirational comps PG and DIS (branded consumer stalwarts) suggest the potential for 2x multiple expansion.
Exp. gain: +28% to $29.5/share.
Full MAT write-up (free guest account required):