UPDATE: Bank Of America Reiterates On Avon Products As Visibility Into 2H Recovery Remains Low

In a report published Friday, Bank of America analyst Olivia Tong reiterated a Neutral rating on Avon Products AVP, but lowered the price target from $17.00 to $15.00. In the report, Bank of America noted, “Q1 earnings were well below already tempered expectations and today's call was disappointing, with mgmt calling out improvements that it is seeing internally that it admits are not yet reflected in externals, while providing little detail on what concrete signs are driving said encouragement. To be fair, the Q1 report had some positives, even if ever so slight: Brazil continued to be solid as L/C sales were +5% with Beauty +4% and Fashion/Home +11%, declines in Mexico decelerated to -8% y/y vs -15% in Q413, NA operating losses came in ever so slightly, and FCPA litigation has been settled. "Comps get meaningfully easier in 2H so simply a reduction in inefficient spend could lead to y/y margin improvement; however, AVP's continued confidence in a 2H recovery as well as its 3-year targets for +mid-single digit organic sales and double-digit operating margin still do not yet seem to be supported by tangible evidence of progress. We maintain our Neutral on AVP.” Avon Products closed on Thursday at $13.72.