Market Overview

Deutsche Bank: 4 Reasons Why Coty's Stock Is No Longer Attractive

Deutsche Bank: 4 Reasons Why Coty's Stock Is No Longer Attractive
Insider Buys Of The Week: Coty, Keurig Dr Pepper, Take-Two Interactive
30 Stocks Moving In Tuesday's Mid-Day Session
Coty higher with JAB factor still in the background (Seeking Alpha)

Coty Inc (NYSE: COTY)’s in-line third-quarter results and “uninspiring” commentary prompted a sharp sell-off this week and reinforced one analyst's disengagement from the beauty product manufacturer's stock

The Rating

Deutsche Bank analyst Faiza Alwy downgraded Coty from Buy to Hold and cut the price target from $21 to $13.

The Thesis

Four factors that previously justified Deutsche Bank's bullishness are no longer in play, Alwy said in a note: 

  • The earlier thesis assumed a sales decline in the consumer beauty segment would stabilize through successful relaunches of CoverGirl, Clariol and other brands.
  • At the same time, ALMEA’s white space distribution opportunities and tailwinds in China were forecast to drive long-term organic growth.
  • Coty’s operating profit and bottom line were also modeled to rise on synergies from the purchase of Procter & Gamble Co (NYSE: PG)’s specialty beauty segment.
  • Accelerating free cash flow was seen to support acquisitions in high-growth categories.

Price Action

Coty shares were down 0.93 percent at $14.36 at the time of publication Friday afternoon. 

Related Links:

Deutsche Bank Likes Estee Lauder After 'Exceptionally Strong' Quarter

Ulta's Valuation Pushes This Bull To The Sidelines

Latest Ratings for COTY

Aug 2018Morgan StanleyUpgradesEqual-WeightOverweight
Aug 2018CitigroupMaintainsBuyBuy
Aug 2018Wells FargoMaintainsMarket PerformMarket Perform

View More Analyst Ratings for COTY
View the Latest Analyst Ratings

Posted-In: Clairol Covergirl Deutsche Bank Faiza AlwyAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (PG + COTY)

View Comments and Join the Discussion!

Switch's 15-Megawatt Lease Deal Silences A Sell-Side Bear

Here Are The Benzinga Global Fintech Award Finalists For The Best Under-Banked Or Emerging Market Solution