Background:

COTY INC ($COTY) COTY: (%) currently down 40% annually trading near its 52 week low operates in the Consumer Staples sector along with its subsidiaries, manufactures, and markets, distributing beauty products worldwide. The company operates through within 4 areas of beauty products including 1. Fragrances, 2. Color Cosmetics, 3. Skin & Body Care, and 4. Brazil Acquisition. The stock has a $12.24 billion market cap with over 748 million shares outstanding and a 10% short float.

 

Insider Buying:

As of 8/24-25/2017 Director (R. Singer) purchased 20,000 shares, Officer (S. Moreau) purchased 48,000 shares, and CEO (C. Pane) purchased 48,000 shares trading between $16.30-$16.80.

 

Earnings Rating:

The Q4 Earning’s Statement released on August 22nd provided breakeven adjusted earnings, compared with the prior-year period’s $0.13 per share. Coty reported a loss of $0.41 per share ($304.8 million) vs. $0.09 last year ($31 million). Revenue was $2.24 billion, up from $1.08 billion in the same quarter last year. Despite these Q4 earning statements for $COTY the company provided weak guidance following the acquisition of P&G’s Beauty Unit. However, the board of directors also promised in the Q4 $COTY conference call a quarterly cash dividend of $0.125 per common share, payable on Sept. 14 to shareholders of record on Sept. 1.

 

Analyst Ratings:

  1. Research Team: REDUCE Rating (Updated 8/28/2017)
  2. CFRA: 3 OUT OF 5 STAR Rating (Updated 8/23/2017)
  3. Ford Equity Research: Sell Rating (Updated 8/24/17)
  4. The Street: HOLD rating (Updated 8/26/2017)
  5. Market Edge: AVOID rating (Updated 8/24/2017)

Technical Analysis:

finviz dynamic chart for  COTY

The 1 year daily chart for $COTY indicates that following the over 10% drop on earnings on August 22nd the stock is trading below all major simple moving averages (i.e., 20, 50, 200). The ascending wedge pattern indicated that the purple upper resistance line of the wedge tested in early August at $20.88 was rejected falling below the support line within the wedge at $18.50. The stock eventually bottomed out at the support low at $15.82, which now provides a opportunity for a retracement higher to retest the $21 area.

Target 1: $18

Target 2: $20.50

 Target 3: $22

Long Term Target 4: $24

Stop: $15.85


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