We are initiating coverage on Coty with fair value estimates of $10.50 and EUR 9.50 per share, which implies 18 times multiple against our adjusted fiscal 2025 (ending in June) earnings estimate and a fiscal 2025 enterprise value to adjusted EBITDA multiple of 12 times. However, we don't see an attractive risk/reward in shares at present.
We think CEO Sue Nabi, with her 20 years of experience at L’Oreal and track record of successfully launching high-end skincare brand Orveda, has the vision and skillset to accelerate growth at Coty.
Coty’s lack of premium skincare and makeup brands handicaps its ability to benefit fully from the premiumization trends in beauty.
|
Metric
|
COTY
|
4911
|
EL
|
|---|---|---|---|
Price/Earnings (Normalized) | 22.64 | 50.14 | 60.17 |
Price/Book Value | 2.79 | 2.50 | 8.84 |
Price/Sales | 1.75 | 1.53 | 3.07 |
Price/Cash Flow | 14.42 | 14.60 | 29.12 |
|
Metric
|
COTY
|
4911
|
EL
|
|---|---|---|---|
Quick Ratio | 0.29 | 0.77 | 0.85 |
Current Ratio | 0.79 | 1.29 | 1.45 |
Interest Coverage | 2.98 | 5.46 | 3.15 |
|
Metric
|
COTY
|
4911
|
EL
|
|---|---|---|---|
Return on Assets (Normalized) | 3.52% | 2.58% | 4.32% |
Return on Equity (Normalized) | 12.32% | 5.47% | 16.75% |
Return on Invested Capital (Normalized) | 7.31% | 3.91% | 6.79% |
|
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|
Name
|
Morningstar Rating for Stocks
|
Economic Moat
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Market Cap
|
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