Is COTY a good stock to buy? We came across a bullish thesis on Coty Inc. on r/ValueInvesting by Independent-Fragrant. In this article, we will summarize the bulls’ thesis on COTY. Coty Inc.’s share was trading at $1.96 as of June 23rd. COTY’s trailing and forward P/E were 104.33 and 5.97 respectively according to Yahoo Finance.
trung-do-bao-AynL5XXQsGc-unsplash
Coty Inc. is a $5.8B global fragrance and beauty company that appears positioned for a significant re-rating as operational discipline, portfolio simplification, and a newly empowered leadership structure begin to align. The company generates EBITDA at roughly 6x while trading at deeply compressed valuation levels compared to peers, despite owning a portfolio anchored in prestige fragrances that continue to grow at high-single-digit rates.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
Its Consumer Beauty division remains the primary drag, but it is under strategic review for potential sale or restructuring, which would streamline earnings and improve margins. The appointment of a former Procter and Gamble veteran with deep category expertise revitalization adds credibility to the turnaround, particularly as he consolidates CEO and Chairman roles and signals aggressive cost and portfolio rationalization. Insider buying and significant option-based compensation further align management with equity upside.
Financially, the business is stable with over $500M operating cash flow, manageable near-term debt maturities, and no near-term liquidity stress. On valuation, even a modest normalization to 8x EBITDA implies a share price near $4, while a sale of Consumer Beauty or further multiple expansion toward peer levels could drive $5–8 per share outcomes, representing substantial upside from current levels.
The core prestige fragrance segment, which includes global licensed brands, continues to demonstrate resilience, margin strength, and brand momentum. While risks remain around historical execution inconsistency, high leverage, and past leadership turnover, the combination of cost discipline, potential asset monetization, and improving governance creates a skewed risk-reward profile favoring upside re-rating if execution stabilizes.
Previously, we covered a bullish thesis on The Estée Lauder Companies Inc. (EL) by Alexandru Dragut in February 2025, which highlighted Beauty Reimagined initiative PRGP cost cuts Asia recovery catalysts and its luxury beauty portfolio moat. EL’s stock price has appreciated by approximately 12% since our coverage. Independent-Fragrant shares a similar view but emphasizes on Coty Inc. turnaround through CEO change Consumer Beauty divestiture and EBITDA multiple re-rating.
Coty Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held COTY at the end of the first quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of COTY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COTY and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
