Coty (COTY) Maintains Strategic Shift Despite Margin Pressures

Coty Inc. (NYSE:COTY) is one of the best mid cap stocks to buy according to hedge funds. On November 9, Morgan Stanley analyst Dara Mohsenian maintained a Hold rating on Coty Inc. (NYSE:COTY) with a $4.25 price target, citing mixed financial signals. While first-quarter adjusted EBITDA met expectations, the company faced declining organic sales and margin pressures, alongside challenges from retailer destocking and uneven Consumer Beauty execution.

CFRA Cuts Coty Inc. (COTY) Price Target Concerned by Beauty Industry Trends

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Cost savings and disciplined spending helped stabilize earnings, but limited visibility and modest sales underperformance led Mohsenian to slightly lower future EBITDA estimates, keeping a cautious stance despite potential for gradual improvement.

Nevertheless, Coty delivered first-quarter fiscal 2026 earnings on November 6, with sales coming close to the favorable end of the prior guidance. The company benefited from strengthening execution in the US, driven by strategic initiatives and market-leading fragrance innovations. Revenue for the quarter was $1.58 billion, a 6% decrease from the same period last year. Net income decreased to $64.6 million from a net income of $79.6 million in the prior year. Adjusted earnings per share declined to $0.12 from $0.15 a share last year.

Coty CEO Sue Nabi said the company is moving faster toward becoming a Prestige beauty brand, focusing on fragrances, cosmetics, and skincare. She added that Coty will invest in its strongest portfolio brands while growing its new licenses and labels.

Coty Inc. (NYSE:COTY) is a global beauty company that develops, manufactures, and markets a wide range of fragrance, color cosmetics, and skin and body care products across both prestige and mass-market brands. It is one of the world’s largest beauty companies.

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