Mattel Inc.'s stock tumbled 7.4% in morning trade Thursday, extending losses toward a 20-month low after the toy maker said it was slashing its dividend by more than half. The stock slumped 2.2% on Wednesday, after the company also said at its investor day in New York that it targeted revenue growth in the mid-to-high single-digit percentage range "in the medium-term." UBS analyst Arpine Kocharyan said that while the dividend cut was already priced in, it's difficult to value the stock based on "medium-term" targets, which provides little clarity regarding the timeline of a recovery. "If Mattel has found it challenging to forecast the business over a 6-9 month period, would investors be comfortable around valuing a highly seasonal earnings outloo,k that extends 3-4 years and Mattel's conviction is issuing a mid-to-high single digit revenue growth guidance," Kocharyan wrote in a note to clients. Kocharyan said that while the dividend cut does free up cash, the company didn't provide specifics on how it would allocate that cash. The stock, which was trading at the lowest level since Oct. 5, 2015, has plunged 25.5% year to date, while the S&P 500 has gained 8.1%.
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