| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 15.50 | 399 |
| Intrinsic value (DCF) | 1.75 | -44 |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Coty Inc. is a global leader in the beauty industry, specializing in prestige fragrances, skincare, and color cosmetics, as well as mass-market beauty products. Headquartered in New York, Coty operates in over 150 countries, leveraging a diverse portfolio of iconic brands such as Gucci, Burberry, Calvin Klein, CoverGirl, and Rimmel. The company serves both high-end and mass-market consumers through a multi-channel distribution network, including department stores, e-commerce platforms, and drugstores. Coty's dual-segment strategy—Prestige and Consumer Beauty—allows it to capture growth across different market tiers. With a history dating back to 1904, Coty has established itself as a key player in the $500+ billion global beauty industry, continuously innovating through celebrity collaborations and digital transformation. Its strong brand equity and global reach make it a resilient player in the consumer defensive sector.
Coty presents a mixed investment case. On the positive side, its strong brand portfolio, particularly in prestige fragrances (Gucci, Burberry), provides pricing power and resilience in economic downturns. The company has shown improving profitability, with net income turning positive in recent years. However, high leverage (total debt of $4.26B vs. market cap of $4.15B) remains a concern, and its beta of 1.9 indicates higher volatility than the market. The lack of dividends may deter income-focused investors. Growth prospects are tied to the recovery of travel retail (duty-free) and successful digital transformation. Investors should weigh its brand strength against sector competition and debt levels.
Coty competes in the highly fragmented global beauty industry, where it holds a middle position between pure luxury players (e.g., L'Oréal Luxe) and mass-market specialists (e.g., e.l.f. Beauty). Its key competitive advantage lies in its balanced portfolio of prestige licenses (Gucci, Burberry) and mass brands (CoverGirl, Rimmel), allowing it to straddle multiple price points. However, it lacks the R&D scale of L'Oréal or Estée Lauder in skincare—the fastest-growing beauty category. Coty's reliance on licensed fragrance brands (rather than owned IP) creates renewal risks but reduces development costs. Its 2020s turnaround strategy focused on margin improvement has shown results, yet its digital commerce capabilities trail native e-commerce players like Kylie Cosmetics (now part of Coty) or Fenty Beauty. In emerging markets, Coty faces stiff competition from local players (e.g., Natura in Brazil) with deeper distribution networks. The company's recent partnerships with Kardashian-Jenner brands aim to bolster its social commerce relevance—a critical battleground in beauty.