Coty Inc. (COTY) Stock Is Worth the Long-Term Chance

Analysts at Morgan Stanley upped their rating on shares of Coty Inc. (NYSE:COTY) from Equal-Weight to Overweight in their opinion released on August 28. Societe Generale analysts have downgraded their rating of COTY stock from Buy to Hold in a separate flash note to investors on August 22. Analysts at BofA/Merrill downgraded the stock to a Underperform call from its previous Buy stance, in a research note that dated back to August 16.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Coty Inc. (NYSE:COTY)’s prospects. The earliest insider trade took place on 08/28/2018. Jab Cosmetics B.V. gathered a total of 2.6 million shares of company at average share price of $12.29. The total for the purchase was set at $31.95 million. After this transaction, the 10% Owner account balance stood at 293 million shares. The stock lost -2.93 percent since that insider purchase. On 08/27/2018, Singer Robert S, Director, purchased 25 thousand shares at a price per share of $11.6. This added 290 thousand shares to the insider’s fortune and the stock saw a 2.84 percent rally in value since the news became public. This transaction left 180 thousand shares in the Director account. On 05/15/2018, Chief Scientific Officer Ramos Daniel E performed a purchase transaction worth $669.68 thousand. This purchase at $14.34 each has added 46.7 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded -16.81 percent decrease since the transaction was reported. The insider now is left with 116.52 thousand shares remaining in the account. Singer Robert S, who performs the Director job, bought 15 thousand shares for $211.8 thousand. The acquisition occurred on 05/11/2018 was priced at $14.12 per share. The share price plunged -15.51 percent since the reporting date. Singer Robert S now left with a stake of 155 thousand COTY stock worth $1.85 million after the insider buying.

Coty Inc. (COTY) is expected to jump by 18.44 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $23-month high price target. This represents a whopping 92.79 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $13.25, which represents a return potential of 11.06 percent when compared to the closing price of the stock of $11.93 on Monday, October 08. The lowest price target for the stock is $10 — slightly more than -16.18 percent from COTY’s current share price.

The shares are currently floating around the first support level of $11.66. Below this, the next support is placed in the zone of $11.4. Till the time, the COTY stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 43.42 on daily chart, which may remain a cause for concern. If the price breaks below $11.4 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $12.1 mark may result into a pull-back move towards $12.28 level.

COTY shares accumulated 0.31 points or 2.67 percent on Monday to $11.93 with a light trade volume of 3.747 million shares. After opening the session at $11.58, the shares went as high as $12.01 and as low as $11.57, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $8.83 billion and now has 739.82 million shares outstanding. Coty Inc. (COTY) stock has lost -3.71 percent of market value in 21 trading days.

COTY stock has a trailing 3-year beta of 0.28, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.17 a share in the trailing twelve months. The stock’s value has fallen -40.02 percent year to date (YTD) against a decline of -29.32 percent in 12 month’s time. The company’s shares still trade -44.97 percent away from its 1-year high of $21.68 and 11.18 percent up from 52-week low of $10.73. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Coty Inc. (COTY) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry COTY operates in has an average P/E of 77.55. Its P/E ratio went as low as 49.9X and as high as 58.67 over the 5-year span. Further, it is sporting a 0.94 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.77. 62.1 percent is the gross profit margin for Coty Inc. and operating margin sits at 1.6 percent. Along with this, the net profit margin is -1.8 percent.

Analysts are forecasting revenue to suffer decline of -3.2 percent to $2.17B in the next fiscal quarter, while earnings are seen soaring by nearly -20 percent to $0.08 per share. History has shown that shares in Coty Inc. have gone down on 11 different earnings reaction days and are predicted to add 0.07 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.14 per share, in line with the $0.14, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.3B, worse than the $2.32B analysts expected. Earnings are estimated to increase by 74 percent this year, 20.05 percent next year and continue to increase by 15.5 percent annually for the next 5 years.