Analyst Ashley Helgans of Jefferies maintained a Hold rating on Coty, retaining the price target of $4.00.
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Ashley Helgans has given his Hold rating due to a combination of factors affecting Coty’s future prospects. One significant concern is the impending loss of the Gucci beauty license post-2028, which is a substantial component of Coty’s fragrance portfolio, contributing approximately $550 million in annual sales. This loss is expected to create a notable gap in Coty’s offerings, especially as the company is already heavily reliant on its fragrance segment, which accounts for a significant portion of its revenue.
Additionally, Coty has been experiencing challenges in maintaining its market share in the global prestige fragrance sector, with a noticeable decline since 2017. The company’s operational missteps and execution issues further exacerbate its vulnerability in an increasingly competitive market, where major players are aggressively expanding their portfolios. These factors collectively contribute to the Hold rating, as they present uncertainties in Coty’s ability to sustain growth and secure future licenses.
Helgans covers the Consumer Cyclical sector, focusing on stocks such as Ralph Lauren, Ulta Beauty, and Tapestry. According to TipRanks, Helgans has an average return of -1.9% and a 43.88% success rate on recommended stocks.
In another report released today, TD Cowen also reiterated a Hold rating on the stock with a $4.00 price target.