In a report released yesterday, Joe Lachky from Wells Fargo reiterated a Hold rating on Coty Inc (COTY), with a price target of $10. The company’s shares closed last Monday at $9.33.
Lachky commented:
“We expect proceeds to be far less than the $600MM COTY paid for a 60% stake a little over 2 years ago (we est. $50MM). For FY20, guidance implies modest improvement, but it is hard to see upside to guidance given ongoing challenges in Consumer Beauty. In addition, FY20 guidance is back-end weighted as FQ1 operating profit growth is expected to be moderately down due to higher A&P spending, despite the easiest top-line comparison of the year. Overall, we commend the new mgmt team for bringing stability to the business over the last two quarters. However, we see few n.t. catalysts and think top-line inflection/acceleration will be necessary to move the stock higher. Further, we expect top-line growth to remain weak in part due to COTY’s structurally disadvantaged portfolio, which is unlikely to change in the n.t.”
Currently, the analyst consensus on Coty Inc is a Hold with an average price target of $10.99, a 17.3% upside from current levels. In a report issued on August 20, Stifel Nicolaus also maintained a Hold rating on the stock with a $9 price target.
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The company has a one-year high of $14.13 and a one-year low of $5.91. Currently, Coty Inc has an average volume of 5.56M.
Based on the recent corporate insider activity of 24 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of COTY in relation to earlier this year.
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Coty, Inc. engages in the manufacture, market, sale, and distribution of branded beauty products. It operates through the following segments: Consumer Beauty, Luxury, and Professional Beauty. The Consumer Beauty segment offers color cosmetics, retail hair coloring and styling products, body care, and mass fragrances.
