The new “Barbie” movie, starring Margot Robbie and Ryan Gosling, is positioned to potentially yield significant gains for Mattel, according to recent insights from Goldman Sachs. The film, set to potentially top this weekend’s box office and even beat out Christopher Nolan’s “Oppenheimer,” could well become America’s number-one movie.

Projected domestic box-office earnings for the Barbie debut vary, ranging from a conservative $75 million forecasted by Warner Brothers to an optimistic prediction of $159 million by BoxOffice Pro. The movie seems to be on the right track with a strong 90% rating on Rotten Tomatoes.

What does this mean for Mattel? Well, a successful run at the box office might lead to increased sales of Barbie-related products and inspire the company to create more content tied to its intellectual property. Goldman Sachs has raised its Mattel price target to $24, offering a potential upside of 13% from current levels.

There are three key ways that Mattel could ride the wave of the Barbie movie’s success:

1. Cashing in on Licensing Opportunities Mattel is set to receive licensing fees directly from the movie’s box-office sales, and the company has also signed numerous licensing deals for a variety of products, further enhancing its licensing revenue. Goldman Sachs analyst Stephen Laszczyk noted, “Mattel is collecting licensing fees from each brand for the right to license the Barbie logo/imagery for their own products. We estimate that typical licensing fees of this nature range from 10% to 20% of product revenues.”
2. Saving Big on Marketing Costs The movie has created a whirl of excitement, leading to greater interest in licensed consumer products, and by extension, the classic Barbie toys that Mattel directly sells. This means Mattel may not have to invest heavily in product advertising in the near-to-medium term, according to Laszczyk.
3. Boosting Toy Sales While the PG-13 rating and satirical nature of the Barbie movie suggest it’s primarily aimed at adults, there’s a predicted “halo effect” expected to boost toy sales over the medium-to-long term. As adults reconnect with the brand due to the film, they may become more likely to gift Barbie products, amplifying Barbie’s seasonal sales cycle.

One bonus factor that could benefit Mattel’s stock is the potential for more content creation based on Mattel’s intellectual property. The company already has a Hot Wheels movie, produced by J.J. Abrams, lined up for a 2025 release.

Overall, the Barbie movie’s debut is not just an exciting cinematic event, but it could also prove to be a financial game-changer for Mattel.