Mattel Inc.’s MAT, -1.76% reputation is at risk after a recall of the Fisher-Price brand Rock ‘N Play, Stifel analysts say. Both Mattel and the Consumer Product Safety Commission (CPSC) have warned consumers that infants can roll over in the item. The Rock ‘N Play has been tied to 10 infant deaths since 2015, according to the CPSC. “We stand by the safety of our products,” Chuck Scothon, general manager of Fisher-Price, said in a statement Friday. “However, due to reported incidents in which the product was used contrary to the safety warnings and instructions, we have decided to conduct a voluntary recall of the Rock ‘n Play Sleeper in partnership with the Consumer Product Safety Commission.” Stifel analysts think the recall poses legal risk to Mattel, could lead to manufacturing and design costs, and could drive up marketing costs. “Product recalls, while less frequent, are part of the toy business,” Stifel said. “But they pose reputation risk and may undermine licensor, retailer, and consumer confidence in the safety of a product or brand, lead to litigation and increased compliance costs, all of which could have a negative influence on the industry and/or a toy manufacturer’s business.” Stifel rates Mattel shares hold with a $14 price target. Mattel is scheduled to report first-quarter earnings on April 25. The Fisher-Price brand has struggled, analysts say. Mattel stock, on the other hand, has rallied 36.1% for 2019 so far, outpacing the S&P 500 index SPX, -0.11% which is up 16% for the period.
Have breaking news sent to your inbox. Subscribe to MarketWatch’s free Bulletin emails. Sign up here.