After Kering (PPRUY) and L’Oreal (LRLCY) announced a joint agreement for L’Oreal to acquire Kering Beauty, Jefferies noted that L’Oreal will hold a 50 year exclusive license contract for Gucci Beauty once the license expires with Coty (COTY) in 2028. The Gucci license loss is “a material headwind” for Coty, as Gucci Beauty is Coty’s third-largest fragrance brand and the loss will remove a $550M brand from “a portfolio increasingly reliant on fragrance,” says the analyst. The firm keeps a Hold rating and $4 price target on Coty shares, which are down 2% to $4.24 in morning trading.
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