Why TD Cowen Remains Cautious on Coty Inc. (COTY)

Coty Inc. (NYSE:COTY) is among the consumer defensive stocks to buy according to analysts. On December 12, TD Cowen reduced the price target on Coty Inc. (NYSE:COTY) to $3.75 from $4.00, maintaining a ‘Hold’ rating on the stock. The updated price target reflects a potential upside of about 13% from the current price level.

According to the firm, this revision better reflects revenue growth estimates. Still, there are several risk factors, including “post-holiday destocking, promos, mass cosmetics pressure, and slower US recovery,” reported TheFly. Despite these challenges, TD Cowen highlighted some positive points for the company, mainly that U.S. prestige sell-in is expected to see growth reaccelerate in the second quarter, driven by ultra-premium products and fragrance mists.

In the first quarter, Coty Inc. (NYSE:COTY) posted an EPS of $0.12, missing analyst estimates of $0.15, and revenue of $1.58 billion, in line with guidance. Although it witnessed an 8% drop in total net revenue, the company remains a key player in the global fragrance space. That said, the company expects a rebound in net revenue in the second half of fiscal 2026.

CEO Sue Nabi said the company is “committed to re-accelerating performance and doubling down on its strengths.” At the same time, CFO Laurent Mercier added that “we continue to expect a return to profitable sales growth in the second half of fiscal 2026.”

Coty Inc. (NYSE:COTY) is a New York-based provider of branded beauty products worldwide. Founded in 1904, the company operates through two segments: the Prestige and Consumer Beauty.

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