Management's focus on innovation and brand investments has led to improved performance.
Market continues to underappreciate tobacco stocks.
A revitalized portfolio and strengthened execution stand to support sales gains.
The narrow-moat firm's brand investments should support solid volume performance.
We expect to trim our fair value estimate and would suggest investors await a more favorable entry point.
Our longer-term outlook on the narrow-moat firm calls for around 6% sales growth and mid-30s operating margin on average.
We plan to trim our fair value estimate as we temper our near-term sales and profitability forecast for Pinnacle.
Even with the mid-single-digit percentage uptick in the share price after the earnings release, we continue to think the name offers an attractive entry point.
New CEO Pierre Laubies should be able to leverage his experience to help Coty successfully integrate the assets acquired from Procter & Gamble while extracting cost synergies and reducing its debt load.