Coty (COTY) Stock Forecast & Price Target

Coty's adjusted EBITDA for F2Q25 reached $391 million, marking a 7% year-over-year increase and surpassing consensus estimates, while the adjusted operating margin improved by 220 basis points to 23.4%. The company's enhanced financial performance was further supported by a rise in adjusted gross margin to 66.8%, attributed to effective supply chain management, pricing actions, and a reduction in excess and obsolescence charges. With expectations of free cash flow growth in the double-digit percentage range and leverage projected to decrease below 2.5x by the end of CY25, Coty is well-positioned for continued financial stability and growth.

Coty reported a year-over-year decline in organic sales for F2Q25, marking its first drop since the onset of the COVID-19 pandemic, which fell short of guidance. The company's Consumer Beauty segment underperformed compared to its mass beauty peers, with a 4% decline in sales versus the peer average growth of approximately 2.7%. Additionally, Coty lowered its expectations for F2025, anticipating further declines in organic sales and adjusted EBITDA, highlighting ongoing challenges in key markets like China and the U.S.