Analyst Estimates: Here's What Brokers Think Of Coty Inc. (NYSE:COTY) After Its First-Quarter Report

As you might know, Coty Inc. (NYSE:COTY) recently reported its quarterly numbers. Revenues beat expectations, coming in 3.9% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Coty after the latest results.

Check out our latest analysis for Coty

Following the latest results, Coty's 15 analysts are now forecasting revenues of US$6.10b in 2024. This would be an okay 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 53% to US$0.20 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$6.04b and earnings per share (EPS) of US$0.28 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The consensus price target held steady at US$12.75, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Coty, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$10.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Coty is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.8% annualised growth until the end of 2024. If achieved, this would be a much better result than the 8.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.0% annually. So while Coty's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Coty going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Coty (1 shouldn't be ignored!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.