Zacks Investment Research Lowers Coty (COTY) to Sell

Zacks Investment Research lowered shares of Coty (NYSE:COTY) from a hold rating to a sell rating in a research report sent to investors on Monday.

According to Zacks, “Coty has lagged the industry in the past three months due to persistent softness at its significant Consumer Beauty segment. The unit remained pressurized in the third quarter of fiscal 2018, wherein organic sales dropped 4.4%, hurt by wreak brands and tough pricing in Brazil. Also, continued weakness in the global mass beauty market, stiff competition and underlying hurdles in North America remained deterrents. Though management is working toward enhancing this segment, full recovery is likely to take time. Nonetheless, the company’s Luxury and Professional Beauty units delivered solid performances in the third quarter, wherein sales and earnings topped estimates. While earnings were backed by strong revenues and stringent cost control, sales were fueled by gains from Younique and Burberry buyouts. Also, innovations and e-commerce remain drivers. All said, management expects modest net revenue growth in the second half of fiscal 2018.”

A number of other analysts have also recently weighed in on COTY. BMO Capital Markets raised their target price on shares of Coty from $22.00 to $24.00 and gave the stock a buy rating in a report on Friday, February 9th. Citigroup raised their target price on shares of Coty from $21.00 to $23.00 and gave the stock a buy rating in a report on Friday, February 9th. Stifel Nicolaus restated a buy rating on shares of Coty in a report on Friday, February 9th. Barclays set a $20.00 target price on shares of Coty and gave the stock a hold rating in a report on Saturday, February 10th. Finally, JPMorgan Chase raised their target price on shares of Coty from $15.00 to $17.00 and gave the stock an underweight rating in a report on Monday, February 12th. Four equities research analysts have rated the stock with a sell rating, eight have issued a hold rating and seven have issued a buy rating to the company’s stock. Coty currently has an average rating of Hold and a consensus price target of $18.68.

Shares of NYSE:COTY opened at $14.18 on Monday. The company has a market cap of $10.88 billion, a P/E ratio of 26.38, a price-to-earnings-growth ratio of 1.63 and a beta of 0.38. Coty has a 1-year low of $14.12 and a 1-year high of $14.38. The company has a quick ratio of 0.67, a current ratio of 0.99 and a debt-to-equity ratio of 0.80.

Coty (NYSE:COTY) last issued its earnings results on Wednesday, May 9th. The company reported $0.13 earnings per share for the quarter, topping the Zacks’ consensus estimate of $0.12 by $0.01. The firm had revenue of $2.22 billion during the quarter, compared to analysts’ expectations of $2.17 billion. Coty had a negative net margin of 3.13% and a positive return on equity of 4.31%. The firm’s revenue for the quarter was up 9.4% compared to the same quarter last year. During the same period last year, the firm posted $0.15 earnings per share. sell-side analysts anticipate that Coty will post 0.69 EPS for the current year.

The company also recently declared a quarterly dividend, which will be paid on Thursday, June 14th. Investors of record on Thursday, May 31st will be given a $0.125 dividend. The ex-dividend date of this dividend is Wednesday, May 30th. This represents a $0.50 annualized dividend and a dividend yield of 3.53%. Coty’s dividend payout ratio (DPR) is presently 79.37%.

In other news, Director Robert S. Singer purchased 15,000 shares of Coty stock in a transaction that occurred on Friday, May 11th. The stock was acquired at an average price of $14.12 per share, for a total transaction of $211,800.00. Following the transaction, the director now owns 155,000 shares in the company, valued at $2,188,600. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. 1.00% of the stock is currently owned by corporate insiders.

A number of hedge funds have recently added to or reduced their stakes in the business. Franklin Resources Inc. lifted its position in Coty by 11.3% in the 1st quarter. Franklin Resources Inc. now owns 32,962,804 shares of the company’s stock worth $603,227,000 after buying an additional 3,355,105 shares in the last quarter. BlackRock Inc. raised its holdings in shares of Coty by 0.4% during the 1st quarter. BlackRock Inc. now owns 29,143,968 shares of the company’s stock valued at $533,336,000 after purchasing an additional 121,163 shares in the last quarter. JPMorgan Chase & Co. raised its holdings in shares of Coty by 4.1% during the 1st quarter. JPMorgan Chase & Co. now owns 16,040,453 shares of the company’s stock valued at $293,542,000 after purchasing an additional 636,583 shares in the last quarter. Legal & General Group Plc raised its holdings in shares of Coty by 11.4% during the 1st quarter. Legal & General Group Plc now owns 4,063,561 shares of the company’s stock valued at $74,322,000 after purchasing an additional 414,781 shares in the last quarter. Finally, Dimensional Fund Advisors LP raised its holdings in shares of Coty by 1.7% during the 1st quarter. Dimensional Fund Advisors LP now owns 3,590,937 shares of the company’s stock valued at $65,713,000 after purchasing an additional 60,358 shares in the last quarter. Institutional investors own 68.24% of the company’s stock.

Coty Company Profile

Coty Inc, together with its subsidiaries, manufactures, markets, sells, and distributes beauty products worldwide. It operates in three segments: Consumer Beauty, Luxury, and Professional Beauty. The Consumer Beauty segment offers color cosmetics, retail hair coloring and styling products, body care products, and mass fragrances primarily through hypermarkets, supermarkets, drug stores and pharmacies, mid-tier department stores, and traditional food and drug retailers, as well as own branded e-commerce and direct to consumer Websites.

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