COTY Should I Buy
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Coty Inc is not a good buy for a beginner investor with a long-term strategy at this time. The stock is facing significant challenges, including declining financial performance, bearish technical indicators, and mixed to negative analyst sentiment. While there are some efforts to streamline operations and focus on core brands, the lack of clear positive catalysts and the absence of strong trading signals make it unsuitable for investment under the given scenario.
The technical indicators are bearish. The MACD is negatively expanding, RSI is in the neutral zone but leaning towards oversold, and moving averages indicate a downward trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level of 2.541, with resistance levels far above at 3.328 and 3.571, suggesting limited immediate upside potential.
Coty is reallocating resources towards digital marketing and AI to enhance competitiveness. Management is focusing on streamlining SKU management and core brands, which could yield long-term benefits.
The company is facing gross margin pressures, declining financial performance, and uncertainty due to the withdrawal of FY26 guidance. Analysts have significantly lowered price targets, and the stock is underperforming. The interim CEO's execution remains a key risk factor.
In 2026/Q1, revenue dropped by -5.64% YoY to $1.577 billion, net income fell by -18.84% YoY to $64.6 million, and EPS declined by -22.22% YoY to 0.07. Gross margin also decreased slightly to 61.98%. These metrics indicate a weakening financial position.
Analysts have lowered price targets significantly, with ratings ranging from Underweight to Neutral. While some analysts see potential for growth under new leadership, the consensus highlights uncertainty and a lack of visibility regarding the company's future strategy.
