Coty (COTY) Stock Forecast & Price Target

Coty has demonstrated significant improvements in its fundamentals since 2020, which positions the company for higher valuation despite current market dynamics. The management anticipates gradual growth in both mass and prestige segments, driven by major product launches and expansion across various channels and geographies. Additionally, the US prestige fragrance sector is showing robust performance, with sell-out growth exceeding market averages, suggesting strong consumer demand and a positive growth trajectory for Coty.

Coty has revised its financial outlook significantly, lowering the FY’26 LFL sales growth forecast to -1.9% from an initial expectation of 0%, alongside a reduction in adjusted EBITDA estimates from $1.1 billion to $1 billion and EPS from $0.50 to $0.47. The company experienced a notable decline in LFL sales, which worsened to a year-over-year decrease of -9% in the fourth quarter after being down -3% in the third quarter, exacerbated by a -12% decline in the Consumer Beauty business. Additionally, gross margins decreased by 195 basis points to 62.3%, indicating underlying profitability challenges that could further strain Coty's financial stability.