Piper Jaffray Remains Sidelined on Coty, Inc. (COTY) - PT to $30
Piper Jaffray reiterated a Neutral rating on Coty Inc. (NYSE: COTY), and cut the price target to $30.00 (from $31.00), following the company's 2Q earnings report.
Analyst Stephanie Wissink commented, "There are a lot of moving pieces to the thesis, with a core business that is still under pressure and mergers that have various considerations around growth, scale, costs and financing. We are encouraged by efforts to stem declines in the core biz, which declined just 1% LFL in Q2, an improvement from -2% in the prior quarter. The stepwise lift was a result of the fragrance category moving from (8%) to (3%) sequentially. While the outlook calls for persistently flattish sales, we are optimistic that rationalization of the product catalog can result in modest gains in underlying sales and sales quality through the balance of 2016. Acquisitions of Bourjois, Hypermarcas in Brazil and the pending PG Beauty lift-out create a bit of noise and uncertainty, but are widely accepted in the current valuation. Our PT moves to $30/sh (from $31) based on 24x PF EPS of $1.27."
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Shares of Coty Inc. closed at $28.36 yesterday.