Analysts See Uncertainty Around Coty Inc. (COTY)

Coty Inc. (NYSE:COTY) is one of the 10 Best US Penny Stocks to Buy. On December 23, Banco Santander downgraded its rating on Coty Inc. (NYSE:COTY) from Outperform to Neutral and set a price target of $3.50. The firm noted that the company’s “transition phase” may take longer due to the CEO change.

On December 22, Evercore ISI also downgraded Coty Inc. (NYSE:COTY) from Outperform to In Line and set a price target of $7. This update comes after the departure of the company’s CEO, Sue Nabi. Coty Inc. (NYSE:COTY) announced that Markus Strobel, a Procter & Gamble veteran, has been appointed Executive Chairman of the Board and Interim CEO. Evercore ISI sees this moment as a “pivotal juncture” for the company at a time when it is conducting a strategic review of its Consumer division.

According to Evercore ISI’s analysis, the Consumer division accounts for about 15% of Coty Inc.’s (NYSE:COTY) profits but it also creates “nearly all of the operational challenges and bearish sentiment” for the company. The research firm noted that there is limited “visibility on timing and catalysts for a potential value unlock.” Evercore ISI sees the stock as undervalued but it noted that it is expected to “remain undervalued” as near-term outperformance is unlikely.

Previously, on December 12, TD Cowen lowered its price target on Coty Inc. (NYSE:COTY) from $4.00 to $3.75 and kept its Hold rating. The firm pointed to risks such as post-holiday inventory reductions, promotional pressures, a challenging environment in mass cosmetics, and a slower-than-expected recovery in the US market.

Coty Inc. (NYSE:COTY) is an American multinational beauty company with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care.

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Disclosure: None. This article is originally published at Insider Monkey.