Coty's Transformation Agenda Could Make The Stock Run 40% Up

Nov. 09, 2021 1:08 PM ETCoty Inc. (COTY) StockCOTY10 Comments
Alephbe Investments
379 Followers

Summary

  • Coty Inc. is one of the largest beauty conglomerates owning a large portfolio of brands of color cosmetics as well as skin and body care.
  • Management expects to execute cost control, optimize its supply chain through speed and agility, and intensive e-commerce investments.
  • Selling certain non-performing brands, buying others, and strengthening the balance sheet, Coty will most likely be interesting for the investment community.
  • I included sales of $5-$6.3 billion, an EBITDA around $269 million and $844 million, and a D&A of $585-$312 million. The result would include an unlevered free cash flow that ranges from $704 million to $1.026 billion.
  • I believe that the downside risk is less significant than the upside potential.

Western Brands Under Pressure In China Over Xinjiang Criticism

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The comprehensive transformation agenda and the most recent transactions announced by Coty Inc. (NYSE:COTY) seem, in my view, very beneficial. If we also take into account the potential expansion in China and the balance sheet deleveraging currently taking

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From China, I am a financial consultant. I have worked 10 years in Europe for some big banks. I am into growth stocks. I do not guarantee or provide any warranties or representations as to the accuracy, timeliness, completeness, reliability or usefulness of any information I provide. Use of my comments is at User's sole risk. Under no circumstances, including, but not limited to, negligence, shall I be liable for any direct, indirect, incidental, special or consequential damages, even if they have been advised of the possibility of such damages. User specifically acknowledges and agrees that I am not liable for any conduct of any User. I also don't give financial advice.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of COTY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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