DB:CO3A

Stock Analysis Report

Executive Summary

Coty Inc., together with its subsidiaries, manufactures, markets, distributes, and sells beauty products worldwide.

Rewards

Trading at 66.4% below its fair value

Earnings are forecast to grow 52.42% per year

Risk Analysis

Dividend of 4.38% is not well covered by earnings

Significant insider selling over the past 3 months



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Coty's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CO3A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.5%

CO3A

-0.05%

DE Personal Products

1.7%

DE Market


1 Year Return

5.4%

CO3A

16.2%

DE Personal Products

15.0%

DE Market

Return vs Industry: CO3A underperformed the German Personal Products industry which returned 16.2% over the past year.

Return vs Market: CO3A underperformed the German Market which returned 15% over the past year.


Shareholder returns

CO3AIndustryMarket
7 Day-3.5%-0.05%1.7%
30 Day2.1%1.8%0.8%
90 Day-5.5%1.9%3.7%
1 Year13.7%5.4%18.4%16.2%18.5%15.0%
3 Year-32.2%-41.2%43.8%34.6%17.1%6.9%
5 Year-36.5%-46.4%73.6%55.3%24.3%7.3%

Price Volatility Vs. Market

How volatile is Coty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Coty undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CO3A (€10.42) is trading below our estimate of fair value (€31)

Significantly Below Fair Value: CO3A is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CO3A is unprofitable, so we can't compare its PE Ratio to the Personal Products industry average.

PE vs Market: CO3A is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CO3A's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CO3A is good value based on its PB Ratio (1.9x) compared to the XE Personal Products industry average (2.3x).


Next Steps

Future Growth

How is Coty forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

52.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CO3A is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: CO3A is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CO3A's is expected to become profitable in the next 3 years.

Revenue vs Market: CO3A's revenue (0.7% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: CO3A's revenue (0.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CO3A's Return on Equity is forecast to be low in 3 years time (14%).


Next Steps

Past Performance

How has Coty performed over the past 5 years?

-79.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CO3A is currently unprofitable.

Growing Profit Margin: CO3A is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CO3A is unprofitable, and losses have increased over the past 5 years at a rate of -79.4% per year.

Accelerating Growth: Unable to compare CO3A's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CO3A is unprofitable, making it difficult to compare its past year earnings growth to the Personal Products industry (-7.2%).


Return on Equity

High ROE: CO3A has a negative Return on Equity (-60.34%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Coty's financial position?


Financial Position Analysis

Short Term Liabilities: CO3A's short term assets ($3.0B) do not cover its short term liabilities ($3.5B).

Long Term Liabilities: CO3A's short term assets ($3.0B) do not cover its long term liabilities ($9.3B).


Debt to Equity History and Analysis

Debt Level: CO3A's debt to equity ratio (162.1%) is considered high.

Reducing Debt: CO3A's debt to equity ratio has reduced from 441% to 162.1% over the past 5 years.


Balance Sheet

Inventory Level: CO3A has a low level of unsold assets or inventory.

Debt Coverage by Assets: CO3A's debt is not covered by short term assets (assets are 0.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable CO3A has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: CO3A is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -13.5% per year.


Next Steps

Dividend

What is Coty's current dividend yield, its reliability and sustainability?

4.38%

Current Dividend Yield


Dividend Yield vs Market

company4.4%marketbottom25%1.3%markettop25%3.6%industryaverage2.1%forecastin3Years4.1%

Current dividend yield vs market & industry

Notable Dividend: CO3A's dividend (4.38%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: CO3A's dividend (4.38%) is in the top 25% of dividend payers in the German market (3.59%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CO3A has been paying a dividend for less than 10 years.

Growing Dividend: CO3A's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: CO3A is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: CO3A's dividends in 3 years are forecast to be covered by earnings (55.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Pierre Laubies (62yo)

1.3yrs

Tenure

US$16,766,859

Compensation

Mr. Pierre Laubies has been the Chief Executive Officer and Director of Coty Inc. since November 12, 2018 and also serves as its President of Consumer Beauty. Mr. Laubies served as the Chief Executive Offi ...


CEO Compensation Analysis

Compensation vs Market: Pierre's total compensation ($USD16.77M) is above average for companies of similar size in the German market ($USD3.37M).

Compensation vs Earnings: Insufficient data to compare Pierre's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Pierre Laubies
CEO & Director1.3yrsUS$16.77m0.42% $33.9m
Pierre-André Terisse
Chief Financial Officer1yrsUS$3.75m0.020% $1.6m
Greerson McMullen
Chief Legal Officer3.3yrsUS$6.35m0.021% $1.7m
Edgar Huber
President of Americas & Asia Pacific3.3yrsUS$8.68m0.025% $2.0m
Ayesha Zafar
Senior VP & Group Controller3.8yrsUS$1.44m0.0034% $273.7k
Daniel Ramos
Chief Scientific Officer2.4yrsUS$4.95m0.015% $1.2m
Olga Levinzon
Vice President of Investor Relations0.7yrsno datano data
Sophie Hanrot
Chief Human Resources Officer0.6yrsno data0.0021% $164.1k
Peggy Elsrode
Senior Vice President of North America Luxury5.5yrsno datano data
Sylvie Moreau
President of Professional Beauty0yrsno data0.013% $1.0m

2.4yrs

Average Tenure

54yo

Average Age

Experienced Management: CO3A's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Pierre Laubies
CEO & Director1.3yrsUS$16.77m0.42% $33.9m
Robert Singer
Independent Director10.1yrsUS$317.10k0.037% $3.0m
Peter Harf
Independent Chairman1.3yrsUS$487.21k1.59% $127.6m
Erhard Schoewel
Lead Independent Director1.3yrsUS$317.10k0.051% $4.1m
Beatrice Ballini
Independent Director0.4yrsno datano data
Sabine Chalmers
Independent Director2.8yrsUS$287.10kno data
Paul Michaels
Independent Director4.7yrsUS$187.10kno data
Pierre Denis
Independent Director0.4yrsno datano data
Olivier Goudet
Independent Director6.8yrsUS$187.10k0.017% $1.4m
Joachim Creus
Independent Director0.3yrsno datano data

1.3yrs

Average Tenure

61.5yo

Average Age

Experienced Board: CO3A's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CO3A insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Coty Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Coty Inc.
  • Ticker: CO3A
  • Exchange: DB
  • Founded: 1904
  • Industry: Personal Products
  • Sector: Household
  • Market Cap: US$8.678b
  • Listing Market Cap: US$8.004b
  • Shares outstanding: 760.55m
  • Website: https://www.coty.com

Number of Employees


Location

  • Coty Inc.
  • 350 Fifth Avenue
  • New York
  • New York
  • 10118
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
COTYNYSE (New York Stock Exchange)YesClass A Common StockUSUSDJun 2013
CO3ADB (Deutsche Boerse AG)YesClass A Common StockDEEURJun 2013
0I4ALSE (London Stock Exchange)YesClass A Common StockGBUSDJun 2013
COTY34BOVESPA (Bolsa de Valores de Sao Paulo)BDR REPR 1/2 COM 'CLASS A' USD0.01BRBRLJul 2015

Biography

Coty Inc., together with its subsidiaries, manufactures, markets, distributes, and sells beauty products worldwide. The company operates in three segments: Luxury, Consumer Beauty, and Professional Beauty. The Luxury segment offers prestige fragrances, and skincare and cosmetics products through various retailers, including perfumeries, department stores, and e-retailers and duty-free shops under the Alexander McQueen, Balenciaga, Burberry, Bottega Veneta, Calvin Klein, Cavalli, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Lacoste, Lancaster, Marc Jacobs, Miu Miu, philosophy, Stella McCartney, and Tiffany & Co. brands. The Consumer Beauty segment offers color cosmetics, retail hair coloring and styling products, mass fragrance, and body care and mass skin care products primarily through hypermarkets, supermarkets, drug stores, pharmacies, mid-tier department stores, traditional food and drug retailers, and e-commerce retailers. It provides its products under the Adidas, Beckham, Beyonce, Biocolor, Bozzano, Bourjois, Bruno Banani, Clairol, CoverGirl, Enrique, Jovan, Nautica, Max Factor, Mexx, Monange, Paixao, Rimmel, Risque, Sally Hansen, Stetson, Wella, Younique, and 007 James Bond brands. The Professional Beauty segment offers hair and nail care products to nail and hair salons, nail and hair professionals, and professional stores through direct sales forces and e-commerce platforms under the Clairol Professional, ghd, Kadus Professional, Londa Professional, Nioxin, O P I, Sassoon Professional, Sebastian, System Professional, and Wella Professionals brands. The company also sells its products to third-party distributors. It sells its products to approximately 150 countries. The company was founded in 1904 and is based in New York, New York. Coty Inc. operates as a subsidiary of Cottage Holdco B.V. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 21:57
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.