WEBULL

A Look At Coty (COTY) Valuation After CEO Change And Analyst Downgrades

Simply Wall St · 5d ago

Coty (COTY) is back in focus after a CEO change, with Sue Nabi departing and Markus Strobel stepping in as Interim CEO, alongside recent analyst downgrades and ongoing operational pressures.

See our latest analysis for Coty.

At a share price of $3.09, Coty’s recent 1 day share price return of 2.52% decline and 30 day share price return of 7.49% decline sit against a 1 year total shareholder return of 54.63% decline. This suggests momentum has been fading as investors reassess risk after weaker organic sales trends and margin pressure, alongside the CEO transition and recent downgrades.

If you are rethinking your exposure to beauty and consumer names after Coty’s leadership change, it could be a useful moment to broaden your search with fast growing stocks with high insider ownership

With Coty shares down sharply over 1 and 3 years, trading at a discount to analyst targets and intrinsic value estimates while still facing weak organic sales and margin pressure, is this a reset entry point or is the market correctly pricing muted prospects?

Most Popular Narrative: 36% Undervalued

With Coty last closing at $3.09 against a narrative fair value of about $4.83, the valuation hinges on how its future growth and margins play out over the next few years.

Analysts are assuming Coty's revenue will grow by 1.3% annually over the next 3 years.

Analysts assume that profit margins will increase from 6.5% today to 4.9% in 3 years time.

Read the complete narrative.

Curious what sits behind that gap between today’s price and the implied value? The narrative leans on gradual revenue lift, margin repair and a future earnings multiple that is not out of line with sector peers. If you want to see exactly how those ingredients combine into the current fair value math, read on for the full breakdown.

Result: Fair Value of $4.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to factor in risks like ongoing inventory destocking and the future loss of the Gucci Beauty license, which could challenge revenue and margins.

Find out about the key risks to this Coty narrative.

Build Your Own Coty Narrative

If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a complete Coty narrative yourself in just a few minutes with Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Coty.

Looking for more investment ideas?

If Coty has you rethinking your watchlist, do not stop here. Casting a wider net with focused stock ideas can help you refine your next move.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.