Coty (COTY) Stock Forecast & Price Target

Coty's fundamentals have significantly improved since 2020, positioning the company for a higher valuation, particularly as management anticipates gradual improvements in both its mass and prestige segments. The expectation for like-for-like (LFL) sales to return to growth in the second half of 2026, bolstered by new product launches and favorable year-over-year comparisons, adds further optimism. Additionally, recent performance in the U.S. prestige fragrance market, where sell-out growth outpaced overall market growth at 1.5 times, underscores the company’s competitive strength and potential for sustained financial performance.

Coty has revised its fiscal year 2026 sales growth forecast to -1.9%, reflecting weaker-than-expected performance and leading to downward adjustments in its adjusted EBITDA and earnings per share estimates. The company's gross margins have also deteriorated, declining by 195 basis points to 62.3%, while its consumer beauty segment experienced a significant drop in like-for-like sales, decreasing by 12%. Furthermore, the ongoing challenges in the mass color cosmetics category contributed to a year-over-year decline of 9% in sales during the fourth quarter, indicating continuing pressures on Coty's revenue streams.