Mattel shares are tanking after its earnings but UBS still thinks its a buy (MAT)

Melia Robinson/Business Insider

Mattel stock is getting crushed today down more than 12% following a major earnings miss.

Mattel posted a loss of 32 cents a share almost double the 17 cents estimated by Wall Street analysts. Sales fell by 15.4 percent in the quarter ended March 31, to $735.6 million, missing estimates of $801.4 million according to Reuters.

Despite all that bad news, UBS reiterated its conviction in a "Buy" rating on Mattel. 

Although sales of Mattel's most well-known brands, Barbie and Fisher-Price fell 13% and 9% during the quarter, UBS expects these brands to give Mattel a bump in the second quarter. UBS says that points of sale for Barbie are up high single digits, Hot Wheels up around high single digits and Fisher-Price up mid-single digits. Lead analyst Arpine Kocharyan explains:

UBS notes the importance of Hot Wheels as one of Mattel's only bright spots, growing at 4.5%.

Some investors have been worried about a dividend cut coming for Mattel shareholders, UBS does not think a cut is likely.

For a real-time Mattel chart, click here.

Markets Insider

NOW WATCH: People are outraged by a Pepsi ad starring Kendall Jenner — here's how the company responded

See Also:

• The timing could be right for the makers of Monopoly and Barbie to do a deal
• 2 small firms are going to make a killing on Cardinal Health's $6.1 billion deal
• Most people would rather double their travel time than fly United, poll finds