Goldman Sachs has revised its price target for Coty (COTY, Financial), reducing it from $8 to $6 while maintaining a Neutral rating. The adjustment comes after Coty released its third-quarter results, which showed weaker-than-anticipated organic sales. Despite these challenges, the company managed a minor victory in operating margins thanks to reduced spending on selling, general, and administrative expenses.
The analyst highlighted that the quarter was marked by weaknesses in Coty's prestige makeup sector and ongoing struggles in its mass color cosmetics division, both of which negatively impacted the company's overall revenue. The adjustments made by Goldman Sachs reflect these underlying issues in Coty's recent performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Coty Inc (COTY, Financial) is $7.85 with a high estimate of $13.50 and a low estimate of $4.50. The average target implies an upside of 71.71% from the current price of $4.57. More detailed estimate data can be found on the Coty Inc (COTY) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Coty Inc's (COTY, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Coty Inc (COTY, Financial) in one year is $10.05, suggesting a upside of 119.91% from the current price of $4.57. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Coty Inc (COTY) Summary page.
COTY Key Business Developments
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Coty Inc (COTY, Financial) has delivered significant productivity savings, achieving approximately EUR40 million in Q3, with a target of EUR120 million for fiscal year 25.
- The company has seen strong EBITDA growth, with a 2% increase in Q3 and a 130 basis points expansion in EBITDA margin.
- Coty Inc (COTY) has successfully reduced its interest expense by EUR26 million year-on-year, reflecting lower debt balance and cost of debt.
- The company has maintained a strong focus on protecting profitability, driving free cash flow, and deleveraging, ending Q3 with a leverage of 3.2 times.
- Coty Inc (COTY) has a robust plan for fiscal year 26, including major launches under top prestige brands and sizable distribution expansion plans.
Negative Points
- Coty Inc (COTY) experienced a 3% decline in net revenues in Q3, with a 2.5% decline in prestige sales.
- The company faced a triple negative effect on its business due to a slowing prestige fragrance market, dominated by extensions rather than major innovations.
- Coty Inc (COTY) reported a 4.8% decline in Consumer Beauty sales, with flat volumes and declines in color cosmetics.
- The US market posed significant challenges, with like-for-like sales declining in Q3, impacting fiscal year-to-date results.
- The company anticipates a high single-digit like-for-like decline in Q4, translating to a 2% decline for the fiscal year 25.
