11:52 AM EST, 02/05/2025 (MT Newswires) -- Mattel's ( MAT ) earnings per share growth guidance for 2025 despite US tariffs on China, Canada and Mexico was "surprising," UBS Securities said in a note Wednesday.

Late Tuesday, the toymaker said it expected 2025 adjusted EPS of $1.66 to $1.72, higher than the $1.62 posted in 2024.

UBS attributed the strong guidance to Mattel's ( MAT ) efforts to shift production out of China, optimize its supply chain, and implement pricing strategies, which are helping mitigate the impact of tariffs.

The firm also expects Mattel's ( MAT ) shares to rerate higher, driven by a more diversified portfolio, nimble supply chain, continued cost discipline, and a stronger movie slate in 2025. UBS highlighted that the company's solid balance sheet, growing free cash flow, and buyback programs will support further stock repurchases into 2026.

"It sounds as if Mattel's ( MAT ) mitigating efforts could include a combination of shifting production out of China, pricing and supply chain optimization," UBS said.

The brokerage lifted its price target on Mattel ( MAT ) to $29 from $26, driven by the company's Q4 beat. The buy rating was maintained.

Mattel ( MAT ) shares rose past 15% in recent trading.

Price: 20.82, Change: +2.75, Percent Change: +15.19