Coty initiated with a Hold at Kepler Cheuvreux on high consumer beauty exposure

Kepler Cheuvreux initiated coverage of Coty with a Hold rating and EUR 11 price target following Coty’s recent dual listing in Paris. While the firm thinks new management’s strategy “should put an end to nearly a decade of underperformance” and reposition Coty on a more profitable and cash-generative trajectory, its “still-high” exposure to consumer beauty is expected to continue to hold back margin and growth, which justifies a cheaper multiple than its peers, the analyst tells investors.