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Investing.com - Wells Fargo (NYSE:WFC) has lowered its price target on Coty Inc . (NYSE:COTY) to $4.00 from $5.00 while maintaining an Equal Weight rating on the cosmetics company. According to InvestingPro data, the company maintains impressive gross profit margins of 64.84%, though current market conditions have pushed the stock below its Fair Value.
The stock closed at $3.81 following its fiscal fourth-quarter 2025 results, representing a 21.6% decline compared to a 0.9% drop in the S&P 500 Consumer Staples Index (XLP).
This marks Coty’s lowest closing price on record, excluding the COVID-19 lows from March to November 2020, with shares down 45.3% year-to-date compared to the XLP’s 4.9% gain.
Wells Fargo notes that while Coty’s valuation appears low at 6x EBITDA and 8.5x EPS on calendar year 2026 estimates, the firm believes stabilization in revenue, profit, and debt leverage will be necessary in the coming months.
The company is targeting fiscal year 2026 free cash flow above its fiscal year 2025 level of $278 million, which would represent approximately an 8% free cash flow yield if maintained at current levels.
In other recent news, Coty Inc. reported mixed results for its fourth quarter of 2025. The company posted an earnings per share (EPS) loss of $0.05, significantly missing the expected EPS of $0.02. However, Coty managed to exceed revenue expectations with $1.25 billion, surpassing the forecasted $1.21 billion. Goldman Sachs maintained a Neutral rating on Coty while lowering its price target to $4.50, citing mixed results. RBC Capital also reduced its price target to $10, noting that the company’s guidance for the first half of fiscal year 2026 was underwhelming. BofA Securities lowered its price target to $3.50, attributing the reduction to Coty’s weak performance in the U.S. prestige and mass beauty markets. Jefferies downgraded Coty’s stock from Buy to Hold, reducing its price target to $4.00, due to concerns over the company’s decision to cut investment in its mass cosmetics segment. These developments reflect a cautious outlook from analysts regarding Coty’s future performance.
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