UPDATE: Wells Fargo Upgrades Coty Inc. from Market Perform to Outperform

Wells Fargo earlier upgraded Coty Inc.

from Market Perform to Outperform. In Thursday's research note, Wells Fargo's Ferra sees Q2 results as likely representing the bottom for Coty, and the ending of eroding demand, retail inventory de-stocking, and challenging comps. Ferra believes "the longer-term bull case on the stock remains tied to the high FCF conversion and potentially accretive uses of that cash. In our view, Coty's 13-yr stream of cash tax shields drive free cash well ahead of EPS, affording mgmt options in driving shareholder value, which includes acquisitions, strategic investments and international expansion". Coty shares are up nearly 3 percent to around $13.75 following the Wells Fargo rating change.