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What Leadership Changes Mean for Undervalued Coty

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.

No-moat

Coty also announced changes to its board of directors. Peter Harf, who has been a board member since 1996 will be replacing Bart Becht as chairman. Harf had previously served as CEO of Coty (1993 to 2001) and chairman of Coty's board (from 2001 to 2011). We expect this experience has led Harf to have a cozy relationship with management, and consequently view the company's decision to begin a process to add two new independent board members as prudent. At present, seven of its nine directors are independent, though we note four directors are affiliated with JAB Holdings, which holds 39% of Coty's stock.

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About the Author

Sonia Vora

Equity Analyst
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Sonia Vora is an equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She covers beverage stocks in the consumer sector. She joined Morningstar in 2014.

Vora holds a bachelor’s degree in economics from the University of Chicago.

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