Coty: Balance Sheet Progress Offset by Leadership and Licensing Uncertainty Supports Hold Rating

Canaccord Genuity analyst Susan Anderson maintained a Hold rating on Coty on December 19 and set a price target of $4.00.

Susan Anderson has given his Hold rating due to a combination of factors that balance recent positive developments with elevated strategic uncertainty. The completion of Coty’s divestiture of its remaining Wella stake delivered a cash inflow broadly consistent with expectations and provides a path to reduce leverage toward management’s stated target, with additional optional upside tied to any future Wella monetization event. This transaction removes an overhang around the Wella exit timeline and marginally improves Coty’s financial flexibility and balance sheet profile.

At the same time, Anderson underscores that governance and strategic risks have increased, particularly given reports that the Executive Chair and potentially the CEO may depart, leaving the company’s long-term direction less clear. The prospective leadership reshuffle, combined with uncertainty surrounding the eventual outcome and economics of the Gucci license termination and related legal dispute, limits conviction in Coty’s forward earnings power and brand portfolio strategy. In Anderson’s view, the mix of balance sheet progress and unresolved leadership and licensing questions warrants a neutral stance, supporting a Hold rather than a more decisive Buy or Sell recommendation.

In another report released on December 19, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $3.00 price target.