Barbie Hype: These Stocks Could Be in the Pink Amid Movie Buzz

Chatterbox Moo wrote a column · Jul 14, 2023 14:41

A global marketing blitz has generated massive buzz around $Warner Bros Discovery (WBD.US)$'s "Barbie". The movie has the potential to boost a number of stocks, experts say.

Mattel Inc.

$Mattel (MAT.US)$, the toy maker behind Barbie, is expected to be a key beneficiary as it is on its 'A' game to accessorize the blockbuster release with dozens of retail brand collaborations, according to Dave Bruno, director of retail-market insights at retail-technology company Aptos.

Barbie is Mattel's most profitable franchise, with operating profit margins north of 21%. While the upcoming movie may have limited impact on toy salesinitially, it poses a bigger opportunity in consumer products as it targets an older audience. UBS analyst Arpiné Kocharyan said. If successful, the film could boost Mattel's earnings, "given substantially higher margin of more than 80% on royalty stream." UBS said.

Mattel's stock has risen 19.2% in the last month.

Warner Bros. Discovery

Some box-office forecasts have the movie in contention for a $100 million opening weekend. If the movie becomes a hit, it could be great news for Warner Bros. Discovery, which produced the film.

But Barbie still comes with risks. It could be popular with nostalgic adults but fail to register with toy-hungry 5-year-olds. Box-office returns could be poor, hurting Warner Bros., which mostly covered Barbie's $100 million budget, and spooking the studios that are collectively funding or considering funding 14 other Mattel movies.

Source: Bloomberg

Crocs Inc.

Other companies are also preparing to live in a Barbie world over the coming weeks. "Retailers are all in on the pink promotions and collaborations for this blockbuster-timed release," says Aptos's Bruno, highlighting $Crocs (CROX.US)$ as an example. "Even Crocs, whose legendary brand is built on the extreme comfort of their shoes — the very antithesis of Barbie's arch-bending high heels — has launched a collection of pink Barbie-themed products," he wrote.

Barbie Hype: These Stocks Could Be in the Pink Amid Movie Buzz

Crocs shares, which have risen 9% in the last month, ended Wednesday's session up 5%.

AMC Entertainment Holdings Inc.

Another company eyeing a Barbie boost is movie-theater chain and meme-stock darling $AMC Entertainment (AMC.US)$.

"Who ever said that movies and movie theatres are dead?" tweeted AMC CEO Adam Aron on Sunday.

"I think Barbie will have a successful run in theaters," Alicia Reese, vice president of equity research at Wedbush Securities, told MarketWatch. "It's received excellent reviews and feedbackso far, and it's for most age groups, being a PG title, so [it] should have broad appeal."

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more