Analyst Dara Mohsenian of Morgan Stanley maintained a Hold rating on Coty (COTY – Research Report), reducing the price target to $5.00.
Dara Mohsenian has given his Hold rating due to a combination of factors impacting Coty’s performance. The company has faced challenges in the beauty industry, which have led to weaker-than-expected results. Specifically, Coty reported a decline in like-for-like sales in the third quarter, with notable pressure in the prestige makeup sector and a decrease in consumer beauty sales.
Mohsenian also noted that Coty’s guidance for the fourth quarter indicates further sales declines, driven by inventory reductions and underlying sales pressures. Despite these challenges, the valuation of Coty’s stock appears more compelling, which supports the Hold rating. Additionally, while the prestige fragrance category is stabilizing, the overall market trends in mass beauty have turned negative, further influencing the cautious outlook.
In another report released yesterday, Canaccord Genuity also downgraded the stock to a Hold with a $5.00 price target.