Anna Lizzul, an analyst from Bank of America Securities, reiterated the Buy rating on Coty (COTY – Research Report). The associated price target is $14.00.
Anna Lizzul’s Buy rating for Coty’s stock is influenced by a combination of factors. Coty’s first quarter results revealed a significant growth in all its verticals and geographies, particularly in the prestige fragrance segment where growth was 25%, outpacing the category growth of 10%. This continued momentum in the prestige fragrance sector has enabled Coty to improve its organic sales forecasts for the first half of 2024 and full-year 2024, while also adjusting its EBITDA guidance for 2024. Moreover, Coty anticipates a substantial reduction in inflation by the end of 2024, alongside plans for moderate price increases. The company’s Price/mix is further bolstered by innovative strategies such as transitioning to higher concentrated products in the prestige fragrance segment and premium innovation in Consumer Beauty.
Additionally, Coty’s 2024 guidance was revised upwards for the second time this fiscal year due to enduring strong category trends. Coty now anticipates a 9-11% growth in organic revenue for 2024, an improvement from the previous 8-10% forecast. For the first half of 2024, the company expects an 11-13% growth in organic revenue, up from the initial 10-12% forecast. Adjusted EBITDA for 2024 is also expected to improve, thanks to a strong first quarter performance. Lizzul maintains a Buy rating and a price objective of $14, underpinned by an unchanged Sum of the Parts valuation. The superior growth profile and margins for Prestige, compared to the more limited expansion for Consumer Beauty, supports this valuation.
According to TipRanks, Lizzul is ranked #2443 out of 8489 analysts.
In another report released yesterday, D.A. Davidson also maintained a Buy rating on the stock with a $17.00 price target.
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Coty (COTY) Company Description:
Coty, Inc. engages in the manufacture, market, sale, and distribution of branded beauty products. It operates through the following segments: Consumer Beauty, Luxury, and Professional Beauty. The Consumer Beauty segment offers color cosmetics, retail hair coloring and styling products, body care, and mass fragrances. The Luxury segment comprises of prestige fragrances, premium skincare, and premium cosmetics. The Professional Beauty segment consists hair and nail care products for salon professionals. The company was founded by Francois Coty in 1904 and is headquartered in New York, NY.
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