● AI Equity Research · Consumer Defensive

Coty Inc. (COTY)

AI stock analysis · Household & Personal Products · Last analyzed Aug 19, 2026

Compass Score

2.0/5

Call

Avoid

Price

$2.74

AI Target

$3.13 +14.3%

AI Analyst Summary

Coty trades at a deeply discounted forward P/E of 8.0x and a PEG of 0.18, which superficially appears attractive for a global beauty and personal care brand with exposure to prestige fragrance and mass cosmetics. However, the bull case is undercut by a loss-making trailing earnings profile, -1.3% revenue contraction, and a streak of 0-for-4 EPS misses that signal meaningful execution risk at the operating level. The primary risk is continued margin pressure and debt burden weighing on any path to sustained profitability.

Catalysts

Potential reacceleration in prestige fragrance sales, which has been a key growth segment, could drive positive estimate revisions in coming quarters.
A credible debt reduction milestone or refinancing announcement could meaningfully re-rate the stock given elevated leverage concerns.
Recovery in emerging market consumer spending, where Coty has distribution exposure, could provide a revenue inflection point in H2.

Risks

Persistent EPS misses (0 of 4 quarters) risk further downward estimate revisions, potentially pushing the stock below current support near $2.74.
High debt load constrains financial flexibility; any rise in refinancing costs or credit deterioration could accelerate downside risk.
Revenue contraction of -1.3% YoY in a competitive beauty market could worsen if consumer trade-down or share losses to private label accelerate.

Fundamentals

Pe N/A (loss-making / trailing P/E unavailable); Forward P/E: 8.0x · 2.0/5

No trailing P/E available due to losses. Forward P/E of 8.0x is low in absolute terms but reflects significant earnings uncertainty and a loss-making baseline, limiting confidence in the multiple.

Peg PEG: 0.18 · 5.0/5

A PEG of 0.18 is exceptionally low, implying the stock is deeply undervalued relative to its expected growth rate. However, this figure must be interpreted cautiously given the current loss-making status and near-zero earnings base, which can mechanically distort PEG.

Analyst Rating Hold (3.1) · 3.0/5

Consensus of 3.1 maps to a Hold, with a breakdown of 1 Buy, 14 Hold, and 2 Sell across 14 analysts. Sentiment is cautious and broadly neutral, with no meaningful bullish conviction from the street.

Earnings Trend Earnings Growth YoY: N/A; Revenue Growth YoY: -1.3% · 1.0/5

No positive earnings growth trend is discernible — the company is loss-making with negative revenue growth of -1.3% YoY. EPS beat rate of 0 of 4 quarters compounds the concern, signaling deteriorating operational execution.

Price Target Beat EPS Beat Rate: 0 of 4 quarters · 1.0/5

Zero EPS beats in the last four reported quarters is a significant red flag. Management has consistently failed to meet expectations, raising serious questions about guidance credibility and forecasting accuracy.

Management Poor execution signal · 1.0/5

A 0-of-4 EPS beat rate, declining revenues, and a neutral-to-negative analyst consensus collectively indicate weak management execution. Capital allocation effectiveness is difficult to assess positively given the persistent earnings misses and loss-making status.

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