Coty (COTY) Stock Forecast & Price Target

Coty has significantly improved its fundamentals since 2020, leading to a justified premium in valuation, despite facing near-term challenges. The company's management anticipates gradual improvement in both mass and prestige business segments throughout the year, bolstered by major product launches and expanded market reach. Additionally, strong performance in the U.S. prestige fragrance market, with sell-out growth exceeding market growth by 1.5 times, reinforces the positive outlook for the company's future revenue potential.

Coty has adjusted its fiscal year 2026 projections, lowering its like-for-like sales growth forecast to -1.9% and its adjusted EBITDA estimate to $1 billion, reflecting softer than anticipated guidance. The company experienced significant declines in sales, particularly within its Consumer Beauty segment, which faced a 12% drop due to ongoing pressures in the mass color cosmetics category, indicating a broader industry challenge that is impacting Coty's market performance. Gross margins are also under strain, deleveraging by 195 basis points to 62.3%, further contributing to a negative outlook on Coty's financial stability and growth prospects.