Coty (COTY) Stock Forecast & Price Target

Coty reported a strong adjusted F2Q25 EBITDA of $391 million, surpassing consensus expectations and reflecting a year-over-year increase of 7%. The company also achieved an adjusted operating margin of 23.4%, up 220 basis points from the previous year, alongside a gross margin of 66.8%, driven by supply chain efficiencies and pricing strategies. Forecasts indicate robust free cash flow growth, anticipated to reach approximately $400 million for the full year, with leverage expected to remain below 2.5 times by the end of calendar year 2025, signaling financial stability and operational improvement.

Coty experienced its first year-over-year decline in organic sales since the COVID pandemic, reporting a -1% growth against guidance of +1%-2%. Additionally, its Consumer Beauty segment underperformed, with a 4% decline compared to an approximate 2.7% growth in mass beauty peers, exacerbated by soft market conditions and inventory reductions in the U.S. Furthermore, Coty has revised its F2025 expectations downward, foreseeing a continued decline in organic sales of 1%-2% for the second half of the fiscal year, compared to broader market consensus predicting growth of 3%-4%.